CHAPTER 588n

CREDIT, JOBS, CAPITAL INVESTMENT
AND TAX INCREMENTAL FINANCING PROGRAMS

Table of Contents

Sec. 32-265. Connecticut Capital Access Fund. Written procedures. Bond authorization for Capital Access Fund and small business assistance program.

Sec. 32-285a. Community Investment Fund 2030 Board. Bond authorization. Report.

Sec. 32-286. Qualified data centers. Tax exemptions. Negotiated host municipality fee agreement.


Sec. 32-265. Connecticut Capital Access Fund. Written procedures. Bond authorization for Capital Access Fund and small business assistance program. (a) As used in this section: (1) “Corporation” means Connecticut Innovations, Incorporated, and (2) “financial institution” means an eligible financial institution, as defined in subsection (e) of section 32-23d, which is approved by the corporation to participate in the program established by this section.

(b) In order to stimulate and encourage the growth and development of the state economy, the Connecticut Capital Access Fund is created to provide portfolio insurance to participating financial institutions to assist them in making loans that are somewhat riskier than conventional loans. The insurance shall be based on a portfolio insurance mechanism applicable to loans enrolled by a financial institution in the program, rather than loans by loan guarantees. The state, acting through Connecticut Innovations, Incorporated, shall enter into a participation agreement with each financial institution approved to participate in the program. A participation agreement entered into by the corporation and a financial institution shall establish a separate loan loss reserve account within such financial institution or a third-party financial institution approved by Connecticut Innovations, Incorporated, owned and controlled by Connecticut Innovations, Incorporated, but earmarked to cover losses on loans enrolled by that financial institution in the program. A separate loan loss reserve account shall be established for each participating financial institution. Each time a financial institution enrolls a loan in the program, payments shall be made into the earmarked loan loss reserve account by the borrower, financial institution and the corporation, in amounts consistent with the provisions of the participation agreement. The financial institution shall be allowed to recover the cost of its payment from the borrower.

(c) To carry out the purposes of this section, the corporation shall have those powers set forth in section 32-23. The corporation shall also have the power to take all reasonable steps and exercise all available remedies necessary or desirable to protect the obligations or interests of the corporation including, but not limited to, the purchase or redemption in foreclosure proceedings, bankruptcy proceedings or in other judicial proceedings of any property on which it holds a mortgage or other lien or in which it has an interest, and for such purposes payment may be made from the Connecticut Capital Access Fund.

(d) Approval of loans for which payments may be made into an account established under this section shall be within the sole discretion of the financial institution making the loan except that such loans shall comply with the requirements specified in the participation agreement.

(e) The corporation shall adopt written procedures in accordance with section 1-121 for implementing the program. Such written procedures shall include the form of participation agreement which shall set forth procedures for use of the program and the rights and responsibilities of participating financial institutions and the corporation. The participation agreement shall require that loans enrolled in the program shall be for a business purpose in the state and shall not be used for residential housing, passive real estate ownership, an insider transaction or to refinance a prior loan by the financial institution which was not covered under the program, except that if new funds are provided to a borrower, an amount equal to the amount of the new funds may be covered under the program.

(f) (1) For the purposes described in subdivision (2) of this subsection, the State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate five million dollars.

(2) The proceeds of the sale of said bonds, to the extent of the amount stated in subdivision (1) of this subsection, shall be used by the Department of Economic and Community Development to make grants to Connecticut Innovations, Incorporated for deposit in the Connecticut Capital Access Fund to be used for the purposes authorized under this section and section 32-341.

(3) All provisions of section 3-20, or the exercise of any right or power granted thereby which are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. None of said bonds shall be authorized except upon a finding by the State Bond Commission that there has been filed with it a request for such authorization, which is signed by or on behalf of the Secretary of the Office of Policy and Management and states such terms and conditions as said commission, in its discretion, may require. Said bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

(P.A. 92-236, S. 6, 48; P.A. 93-382, S. 41, 69; June Sp. Sess. P.A. 93-1, S. 22, 35, 45; P.A. 95-250, S. 1; 95-272, S. 21, 29; P.A. 96-211, S. 1, 5, 6; P.A. 00-187, S. 57, 75; June 12 Sp. Sess. P.A. 12-1, S. 152; June Sp. Sess. P.A. 21-2, S. 284.)

History: P.A. 93-382 amended Subsec. (f)(2) to require bond proceeds to also be used for purposes of Sec. 32-341, effective July 1, 1993; June Sp. Sess. P.A. 93-1 amended Subsec. (f) to increase bond authorization from $5,000,000 to $10,000,000 and to specify that grants are to be made to Connecticut Development Authority and used for purposes of section, effective July 1, 1993; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development; P.A. 95-272 amended Subsec. (f)(1) to reduce authorization to $5,000,000, effective July 1, 1995; P.A. 00-187 amended Subsec. (a) to redefine “financial institution” and make a technical change, effective July 1, 2000; pursuant to June 12 Sp. Sess. P.A. 12-1, “Connecticut Development Authority” and “authority” were changed editorially by the Revisors to “Connecticut Innovations, Incorporated” and “corporation”, respectively, effective July 1, 2012; June Sp. Sess. P.A. 21-2 amended Subsec. (b) by adding “within such financial institution or a third-party financial institution approved by Connecticut Innovations, Incorporated” re separate loan loss reserve account, effective July 1, 2021.

Sec. 32-285a. Community Investment Fund 2030 Board. Bond authorization. Report. (a) As used in this section:

(1) “Administrative costs” means the costs paid or incurred by the administrator of the Community Investment Fund 2030 Board established under subsection (b) of this section, including, but not limited to, allocated staff costs and other out-of-pocket costs attributable to the administration and operation of the board;

(2) “Administrator” means the Commissioner of Economic and Community Development, or the commissioner's designee;

(3) “Eligible project” means:

(A) (i) A project proposed by a municipality, community development corporation or nonprofit organization, for the purpose of promoting economic or community development in the municipality or a municipality served by such corporation or organization, such as brownfield remediation, affordable housing, establishment of or improvements to water and sewer infrastructure to support smaller scale economic development, pedestrian safety and traffic calming improvements, establishment of or improvements to energy resiliency or clean energy projects and land acquisition and capital projects to construct, rehabilitate or renovate buildings and structures to facilitate or improve home rehabilitation programs and facilities such as libraries and senior centers; or

(ii) A grant-in-aid proposed by a municipality, community development corporation or nonprofit organization for the purpose of providing (I) a revolving loan program, microloans or gap financing, to small businesses located within such municipality or a municipality served by such corporation or organization, or (II) start-up funds to establish a small business in any such municipality; and

(B) Such project or grant-in-aid furthers consistent and systematic fair, just and impartial treatment of all individuals, including individuals who belong to underserved and marginalized communities that have been denied such treatment, such as Black, Latino and indigenous and Native American persons; Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender and queer persons and other persons comprising the LGBTQ+ community; persons who live in rural areas; and persons otherwise adversely affected by persistent poverty or inequality; and

(4) “Municipality” means a municipality designated as a public investment community pursuant to section 7-545 or as an alliance district pursuant to section 10-262u.

(b) (1) There is established a Community Investment Fund 2030 Board, which shall be within the Department of Economic and Community Development. The board shall consist of the following members:

(A) The speaker of the House of Representatives and the president pro tempore of the Senate;

(B) The majority leader of the House of Representatives, the majority leader of the Senate, the minority leader of the House of Representatives and the minority leader of the Senate;

(C) One appointed by the speaker of the House of Representatives and one appointed by the president pro tempore of the Senate, each of whom shall be a member of the Black and Puerto Rican Caucus of the General Assembly;

(D) The two chairpersons of the general bonding subcommittee of the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding;

(E) Two appointed by the Governor; and

(F) The Secretary of the Office of Policy and Management, the Attorney General, the Treasurer, the Comptroller, the Secretary of the State and the Commissioners of Economic and Community Development, Administrative Services, Social Services and Housing, or their designees.

(2) All initial appointments shall be made not later than sixty days after June 30, 2021. The terms of the members appointed by the Governor shall be coterminous with the term of the Governor or until their successors are appointed, whichever is later. Any vacancy in appointments shall be filled by the appointing authority. Any vacancy occurring other than by expiration of term shall be filled for the balance of the unexpired term.

(3) Notwithstanding any provision of the general statutes, it shall not constitute a conflict of interest for a trustee, director, partner, officer, stockholder, proprietor, counsel or employee of any person to serve as a member of the board, provided such trustee, director, partner, officer, stockholder, proprietor, counsel or employee abstains and absents himself or herself from any deliberation, action and vote by the board in specific respect to such person. The members appointed by the Governor shall be deemed public officials and shall adhere to the code of ethics for public officials set forth in chapter 10.

(4) The speaker of the House of Representatives and the president pro tempore of the Senate shall serve as the chairpersons of the board and shall schedule the first meeting of the board, which shall be held not later than January 1, 2022. The board shall meet at least quarterly.

(5) Eleven members of the board shall constitute a quorum for the transaction of any business.

(6) The members of the board shall serve without compensation, but shall, within the limits of available funds, be reimbursed for expenses necessarily incurred in the performance of their duties.

(7) The board shall have the following powers and duties: (A) Review eligible projects to be recommended to the Governor under subsection (c) of this section for approval; (B) establish bylaws to govern its procedures; (C) review and provide comments to the Department of Economic and Community Development on projects funded through the state's Economic Action Plan as provided under section 32-4p; and (D) perform such other acts as may be necessary and appropriate to carry out its duties described in this section.

(8) The administrator shall hire such employee or employees as may be necessary to assist the board to carry out its duties described in this section.

(c) (1) The Community Investment Fund 2030 Board shall establish an application and review process with guidelines and terms for funds provided from the bond proceeds under subsection (d) of this section for eligible projects. Such funds shall be used for costs related to an eligible project recommended by the board and approved by the Governor pursuant to this subsection and to pay or to reimburse the administrator for administrative costs under this section.

(2) The chairpersons of the board shall notify the chief elected official of each municipality when the application and review process has been established and shall publicize the availability of any funds available under this section. Each such official or any community development corporation or nonprofit organization may submit an application to the board requesting funds for an eligible project. The board shall meet to consider applications submitted and determine which, if any, the board will recommend to the Governor for approval.

(3) (A) The board shall give priority to eligible projects (i) that are proposed by a municipality that (I) has implemented local hiring preferences pursuant to section 7-112, or (II) has or will leverage municipal, private, philanthropic or federal funds for such project, and (ii) that have a project labor agreement or employ or will employ ex-offenders or individuals with physical, intellectual or developmental disabilities. The board shall give additional priority to an application submitted by a municipality that includes a letter of support for the proposed eligible project from a member or members of the General Assembly in whose district the eligible project is or will be located.

(B) In evaluating applications for an eligible project described in subparagraph (A)(ii) of subdivision (3) of subsection (a) of this section, the board shall (i) evaluate the risk of default on the repayment of a proposed loan or financing, (ii) consider the impact of the eligible project on job creation or retention in the municipality, (iii) consider the impact of the eligible project on blighted properties in the municipality, and (iv) consider the overall impact of the eligible project on the community. The board shall not recommend any proposed loan or financing under subparagraph (A)(ii) of subdivision (3) of subsection (a) of this section for which the interest rate varies from the prevailing market rate.

(4) (A) Whenever the board deems it necessary or desirable, the chairpersons of the board shall submit to the Governor a list of the board's recommendations of eligible projects to be funded from bond proceeds under subsection (d) of this section. The board may recommend state funding for eligible projects, provided the total cost of such recommendations shall not exceed one hundred seventy-five million dollars in any fiscal year. Such list shall include, at a minimum:

(i) For each eligible project described in subparagraph (A)(i) of subdivision (3) of subsection (a) of this section, a description of such project, the municipality in which such project is located, the amount of funds sought for such project, any cost estimates for such project, any schematics or plans for such project, the total estimated project costs and the applicable fiscal year to which such disbursement will be attributed; and

(ii) For each eligible project described in subparagraph (A)(ii) of subdivision (3) of subsection (a) of this section, a description of and specific terms for any proposed loans, financing or start-up funds to be provided from such grant-in-aid, the types of small businesses located or to be located in the municipality that may be eligible for such loan, financing or start-up funds, the amount of the grant-in-aid sought and the applicable fiscal year to which such disbursement will be attributed.

(B) The Governor shall review the eligible projects on the list and may recommend changes to any eligible project on the list. The Governor shall determine the most appropriate method of funding for each eligible project and shall provide to the members of the board, in writing, such determination for each eligible project on the list and the reasons therefor. The board may reconsider at a future meeting any eligible project for which the Governor recommends a change. Each eligible project for which the Governor recommends the allocation of bond funds shall be considered at a State Bond Commission meeting not later than two months after the date such eligible project was submitted to the Governor pursuant to subparagraph (A) of this subdivision.

(5) Funds for an eligible project approved under this section may be administered on behalf of the board by a state agency, as determined by the Secretary of the Office of Policy and Management, provided a memorandum of understanding between the administrator of the Community Investment Fund 2030 Board and the state, acting by and through the Secretary of the Office of Policy and Management, has been entered into with respect to such funds and project.

(6) Not later than August 31, 2023, the board shall submit a report, in accordance with the provisions of section 11-4a, to the General Assembly, the Black and Puerto Rican caucus of the General Assembly, the Auditors of Public Accounts and the Governor, for the preceding fiscal year, that includes (A) a list of the eligible projects recommended by the board and approved by the Governor pursuant to this section, (B) the total amount of funds provided for such eligible projects, (C) for each such eligible project, a description of the project and the amounts and terms of the funds provided, (D) the status of the project and any balance remaining of the allocated funds, and (E) any other information the board deems relevant or necessary. The board shall submit such report annually for each fiscal year in which the funds specified in subparagraph (A) of subdivision (3) of this subsection are disbursed for eligible projects.

(7) The Auditors of Public Accounts shall audit, on a biennial basis, all eligible projects funded under this section and shall report their findings to the Governor, the Secretary of the Office of Policy and Management and the General Assembly.

(d) (1) The State Bond Commission may authorize the issuance of bonds of the state, in accordance with the provisions of section 3-20, in principal amounts not exceeding in the aggregate eight hundred seventy-five million dollars. The amount authorized for the issuance and sale of such bonds in each of the following fiscal years shall not exceed the following corresponding amount for each such fiscal year, except that, to the extent the State Bond Commission does not provide for the use of all or a portion of such amount in any such fiscal year, such amount not provided for shall be carried forward and added to the authorized amount for the next succeeding fiscal year, and provided further, the costs of issuance and capitalized interest, if any, may be added to the capped amount in each fiscal year, and each of the authorized amounts shall be effective on July first of the fiscal year indicated as follows:

Fiscal Year Ending June 30,

Amount 

2023

$175,000,000

2024

175,000,000

2025

175,000,000

2026

175,000,000

2027

175,000,000

Total

$875,000,000

(2) The proceeds of the sale of bonds set forth in this subsection shall be used for the purpose of funding eligible projects for which the Governor has determined under subsection (c) of this section that bond funding is appropriate and that no other bond authorization is available.

(e) (1) Upon the agreement of the Governor and the Community Investment Fund 2030 Board, and subsequent to the adoption of a resolution by the General Assembly affirming the reauthorization of the board and the program provided for under this section, the State Bond Commission may authorize the issuance of bonds of the state, in accordance with the provisions of section 3-20, in principal amounts not exceeding in the aggregate one billion two hundred fifty million dollars. The amount authorized for the issuance and sale of such bonds in each of the following fiscal years shall not exceed the following corresponding amount for each such fiscal year, except that, to the extent the State Bond Commission does not provide for the use of all or a portion of such amount in any such fiscal year, such amount not provided for shall be carried forward and added to the authorized amount for the next succeeding fiscal year, and provided further, the costs of issuance and capitalized interest, if any, may be added to the capped amount in each fiscal year, and each of the authorized amounts shall be effective on July first of the fiscal year indicated as follows:

Fiscal Year Ending June 30,

Amount 

2028

$250,000,000

2029

250,000,000

2030

250,000,000

2031

250,000,000

2032

250,000,000

Total

$1,250,000,000

(2) The proceeds of the sale of bonds set forth in this subsection shall be used for the purpose of funding eligible projects for which the Governor has determined under subsection (c) of this section that bond funding is appropriate and that no other bond authorization is available.

(f) All provisions of section 3-20, or the exercise of any right or power granted thereby, that are not inconsistent with the provisions of this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to this section. Temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section, and from time to time renewed. All bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

(P.A. 21-111, S. 112; June Sp. Sess. P.A. 21-2, S. 475.)

History: P.A. 21-111 effective June 30, 2021; June Sp. Sess. P.A. 21-2 amended Subsec. (b)(7) by replacing “subsection (d) of this section” with “section 32-4p”, deleted former Subsec. (d) re funds available under state's Economic Action Plan reserved for certain projects, redesignated existing Subsecs. (e) to (g) as Subsecs. (d) to (f), and made conforming changes throughout, effective July 1, 2021.

Sec. 32-286. Qualified data centers. Tax exemptions. Negotiated host municipality fee agreement. (a) As used in this section:

(1) “Colocation tenant” means a person that contracts with the owner or operator of a qualified data center to use or occupy all or part of a qualified data center for a period of at least two years;

(2) “Eligible qualified data center costs” means expenditures made on or after July 1, 2021, for the development, acquisition, construction, rehabilitation, renovation, repair or operation of a facility to be used as a qualified data center, including the cost of land, buildings, site improvements, modular data centers, lease payments, site characterization and assessment, engineering services, design services and data center equipment acquisition and permitting related to such data center equipment acquisitions. “Eligible qualified data center costs” does not include expenditures made in connection with real or personal property that is located outside the boundaries of the facility to be used as a qualified data center;

(3) “Enterprise information technology equipment” means:

(A) Hardware that support computing, networking or data storage functions, including servers and routers;

(B) Networking systems equipment that support computing, networking or data storage functions and have an industry designation as equipment within the enterprise class or data center class of networking systems; and

(C) Generators and other equipment used to ensure an uninterrupted power supply for the hardware and networking systems equipment under subparagraph (A) or (B) of this subdivision;

(4) “Facility” means one or more contiguous tracts of land in the state and any structure and personal property contained on such land;

(5) “Operator” means a person that contracts with the owner of a qualified data center to operate such qualified data center;

(6) “Owner” means a person that holds a leasehold estate in excess of fifty years or a fee title to a facility;

(7) “Person” means an individual, an estate, a trust, a receiver, a cooperative association, a corporation, a company, a firm, a partnership, a limited partnership, a limited liability company, a limited liability partnership or a joint venture;

(8) “Qualified data center” means a facility that is developed, acquired, constructed, rehabilitated, renovated, repaired or operated, to house a group of networked computer servers in one physical location or multiple contiguous locations to centralize the storage, management and dissemination of data and information pertaining to a particular business or classification or body of knowledge;

(9) “Qualified data center equipment” means computer equipment, software and hardware purchased or leased for the processing, storage, retrieval or communication of data, including:

(A) Computer servers, routers, connections, chassis, networking equipment, switches, racks, fiber optic and copper cables, trays, conduits and other enabling machinery, equipment and hardware, regardless of whether such personal property is affixed to or incorporated into real property;

(B) Equipment used in the operation of computer equipment or software for the benefit of a qualified data center, including component parts, replacement parts and upgrades, regardless of whether the personal property is affixed to or incorporated into real property;

(C) Equipment necessary for the transformation, generation, distribution or management of electricity that is required to operate computer servers and related equipment, including substations, generators, uninterruptible energy equipment, supplies, conduits, fuel piping and storage, cabling, duct banks, switches, switchboards, batteries and testing equipment;

(D) Equipment necessary to cool and maintain a controlled environment for the operation of computer servers and other equipment of a qualified data center, including chillers, mechanical equipment, refrigerant piping, fuel piping and storage, adiabatic and free cooling systems, cooling towers, water softeners, air handling units, indoor direct exchange units, fans, ducting and filters;

(E) Water conservation systems, including equipment designed to collect, conserve and reuse water;

(F) Conduit, ducting and fiber optic and copper cables located outside the qualified data center, that are directly related to connecting one or more qualified data center locations;

(G) Monitoring equipment and security systems;

(H) Modular data centers and preassembled components of any item described in this subsection, including components used in the manufacturing of modular data centers; and

(I) Any other personal property, exclusive of motor vehicles, that is essential to the operations of a qualified data center or that is acquired for incorporation into or used or consumed in the operation of the qualified data center; and

(10) “Qualified investment” means the aggregate, nonduplicative eligible qualified data center costs expended by an owner, operator and colocation tenant of a qualified data center.

(b) Any person that anticipates it will own, operate or be a colocation tenant in a qualified data center in this state may apply to the Commissioner of Economic and Community Development to enter into an agreement in accordance with the provisions of subsection (c) of this section, for exemption from the taxes imposed under chapters 203 and 219 as set forth in subsections (d) and (e) of this section.

(c) (1) Any person described in subsection (b) of this section that seeks an exemption under subsection (b) of this section shall submit an application to the Commissioner of Economic and Community Development, in a manner and form prescribed by the commissioner. If the commissioner approves such application, the commissioner shall enter into an agreement with such person, provided such person demonstrates to the satisfaction of the commissioner that:

(A) The facility to be developed, acquired, constructed, rehabilitated, renovated, repaired or operated will be used as a qualified data center; and

(B) The qualified data center will make, on or before the fifth anniversary of the date an agreement entered into pursuant to this section becomes effective, a qualified investment of at least (i) fifty million dollars if such qualified data center is located in an enterprise zone designated pursuant to section 32-70 or a federal qualified opportunity zone designated pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to time, or (ii) two hundred million dollars if such qualified data center is not located in an enterprise zone or a federal qualified opportunity zone.

(2) Any agreement entered into pursuant to this subsection shall:

(A) Be for a period of twenty years, unless extended under the provisions of subdivision (3) of this subsection, from the date an agreement entered into pursuant to this section becomes effective, which may be in the year in which the construction, rehabilitation, renovation or repair of a qualified data center commences;

(B) Include a five-year qualifying period, from the date an agreement entered into pursuant to this section becomes effective, for the applicable qualified investment amount set forth in subparagraph (B) of subdivision (1) of this subsection to be reached;

(C) Include the payment of an annual fee by the qualified data center, to be determined annually by the commissioner and not to exceed fifty thousand dollars, for the administrative and operational costs of the Office of Data Infrastructure Administration and Security established under subdivision (5) of this subsection. Such fee shall be paid by the qualified data center to the commissioner during each year of such qualifying period or until the applicable qualified investment amount set forth in subparagraph (B) of subdivision (1) of this subsection is reached, whichever is sooner;

(D) Include a detailed description of the capital project that is the subject of the agreement;

(E) Provide that the provisions of the agreement shall be applicable, within the time period such agreement is effective and for the remaining duration of such time period, to any (i) subsequent owner of the qualified data center, (ii) operator or affiliate of the operator of the qualified data center, or (iii) colocation tenant, provided the facility continues to be used as a qualified data center; and

(F) Include provisions for the assessment and payment of the taxes exempted pursuant to such agreement and the rates or amounts of penalties and interest to be imposed thereon, if the commissioner determines that the requirements of the agreement or of a qualified data center are not being met or have not been met.

(3) If a qualified data center makes a qualified investment of at least (A) two hundred million dollars if such qualified data center is located in an enterprise zone designated pursuant to section 32-70 or a federal qualified opportunity zone designated pursuant to the Tax Cuts and Jobs Act of 2017, P.L. 115-97, as amended from time to time, or (B) four hundred million dollars if such qualified data center is not located in an enterprise zone or a federal qualified opportunity zone, the commissioner shall extend to thirty years the period for which an agreement entered into pursuant to this section is effective.

(4) Any qualified data center that enters into an agreement pursuant to this section and makes the applicable qualified investment amount set forth in subdivision (3) of this subsection, and any operator or affiliate of and colocation tenant of such qualified data center, shall be exempt from any financial transactions tax or fee that may be imposed by the state on trades of stocks, bonds, derivatives and other financial products. The exemption under this subdivision shall be effective for a period of thirty years from the date the construction, rehabilitation, renovation or repair of a facility is completed, as determined by the commissioner. The commissioner may incorporate the provisions of this subdivision into the agreement entered into pursuant to this section or amend an existing agreement with a qualified data center to incorporate the provisions of this subdivision.

(5) There is established an Office of Data Infrastructure Administration and Security within the Department of Economic and Community Development. The office shall (A) serve as the liaison between applicants and qualified data centers and other state agencies, (B) provide assistance to applicants and qualified data centers from the preapplication phase to the post-operational stage, and (C) seek to ensure coordinated, efficient and timely responses to applicants and qualified data centers.

(d) (1) With respect to the exemption from the taxes imposed under chapter 219, the Commissioner of Economic and Community Development shall notify the Commissioner of Revenue Services of any person that has entered into an agreement pursuant to this section. The Commissioner of Revenue Services shall provide to such person a certificate that exempts such person, and any contractor or subcontractor of such person, from such taxes for (A) the sale of and the storage, use or other consumption in this state of qualified data center equipment acquired for incorporation into or used and consumed in the development, acquisition, construction, rehabilitation, renovation, repair or operation of a facility that is used or to be used as a qualified data center, (B) the sale of and the acceptance, use or other consumption in this state of any service described under subdivision (37) of subsection (a) of section 12-407, that is used and consumed in the development, acquisition, construction, rehabilitation, renovation, repair or operation of a facility that is used or to be used as a qualified data center, and (C) all electricity used by a qualified data center. Such person, and any contractor or subcontractor of such person, may use such certificate for the purchase, storage, use or other consumption in this state of qualified data center equipment, services and electricity as set forth in this subsection and each seller of such equipment, services or electricity may rely on such certificate.

(2) The certificate provided pursuant to subdivision (1) of this subsection shall apply, during the time period the agreement is effective, to:

(A) Any additional building or structure at a qualified data center to be developed, acquired, constructed, rehabilitated, renovated, repaired or operated, to house a group of networked computer servers, regardless of whether such development, acquisition, construction, rehabilitation, renovation, repair or operation was contemplated at the time of entering into the agreement; and

(B) Any additional qualified data center equipment, services and electricity acquired or used by such qualified data center after the date the agreement was entered into.

(e) (1) With respect to the exemption from the tax imposed under chapter 203, such exemption shall apply to (A) real property, buildings or structures, located within or at a qualified data center, and (B) enterprise information technology equipment used by a qualified data center.

(2) The exemption under this subsection shall apply, during the time period the agreement entered into pursuant to subsection (c) of this section is effective, to:

(A) Any additional building or structure at a qualified data center that is developed, acquired, constructed, rehabilitated, renovated, repaired or operated, to house a group of networked computer servers, regardless of whether any such development, acquisition, construction, rehabilitation, renovation, repair or operation was contemplated at the time of entering into the agreement;

(B) Any additional enterprise information technology equipment used by a qualified data center that is acquired after the date the agreement was entered into; and

(C) Any additional facility acquired by the owner of a qualified data center for the development, construction, rehabilitation, renovation, repair or operation of a qualified data center, after the date the agreement was entered into, provided such owner enters into a negotiated host municipality fee agreement as required under subdivision (4) of this subsection for each such additional facility.

(3) The Commissioner of Economic and Community Development shall notify each municipality in which such facility is located of any agreement entered into pursuant to this section and shall provide the identity of the person with which the commissioner has entered into such agreement, the date such agreement is effective and the terms of the agreement with respect to the exemption from the tax imposed under chapter 203.

(4) (A) No developer or owner shall commence construction, rehabilitation, renovation or repair of a facility that will be a qualified data center unless such owner has entered into a negotiated host municipality fee agreement with the municipality in which such facility is located. Such owner shall enter into a negotiated host municipality fee agreement for each additional facility that will be a qualified data center that such owner acquires. If a facility is located in contiguous municipalities, such owner shall enter into a negotiated host municipality fee agreement with each such municipality.

(B) Each negotiated host municipality fee agreement shall include provisions for the assessment and payment of the tax under chapter 203 exempted pursuant to the agreement entered into pursuant to subsection (c) of this section, and the rates or amounts of penalties and interest to be imposed thereon, if the legislative body of the municipality in which the qualified data center is located determines that the requirements of the negotiated host municipality fee agreement are not being met or have not been met.

(5) The chief elected official of the municipality in which a qualified data center is located shall notify the qualified data center if the legislative body of such municipality determines the requirements of a negotiated host municipality fee agreement entered into pursuant to subdivision (4) of this subsection are not being met or have not been met. The qualified data center shall cure such noncompliance not later than one hundred eighty days after the date of such notification. If the legislative body of such municipality determines the noncompliance has not been cured, the negotiated host municipality fee agreement shall be terminated.

(6) Upon the termination of a negotiated host municipality fee agreement pursuant to subdivision (5) of this subsection or subdivision (2) of subsection (f) of this section, the qualified data center, the owner of the property on which such qualified data center is located or such owner's successors or assigns shall be subject to the tax imposed under chapter 203 and shall be liable for payment of such taxes on the property that was exempted from such tax, from the date of noncompliance under subdivision (5) of this subsection or the date of termination under subdivision (2) of subsection (f) of this section, as applicable. Such liability shall attach to the property as a charge thereon. Such tax and any related penalty and interest shall be due, payable and collectible as other municipal taxes and subject to the same liens and processes of collection.

(f) (1) If the Commissioner of Economic and Community Development terminates an agreement entered into pursuant to subsection (c) of this section due to the commissioner's determination that the requirements of such agreement or of a qualified data center are not being met or have not been met, the commissioner shall notify the Commissioner of Revenue Services and the chief elected official of the municipality in which the applicable qualified data center is located of such termination.

(2) Any negotiated host municipality fee agreement entered into pursuant to subdivision (4) of subsection (e) of this section by such qualified data center shall be terminated as of the date the agreement entered into pursuant to subsection (c) of this section is terminated. The municipality in which such qualified data center is located may use any remedy authorized by the general statutes to secure the interests of such municipality and recover the amount of any fee, tax, penalty and interest that become due and owing to such municipality due to such termination.

(3) The amount of any taxes under chapter 219, penalty or interest that become due and owing pursuant to the termination by the Commissioner of Economic and Community Development of an agreement entered into pursuant to subsection (c) of this section may be collected by the Commissioner of Revenue Services under the provisions of section 12-35. The warrant provided under section 12-35 shall be signed by the Commissioner of Revenue Services or the commissioner's authorized agent. The amount of any such tax, penalty or interest shall be a lien on the real estate of the qualified data center from the last day of the month next preceding the due date of such tax until such tax is paid. The Commissioner of Revenue Services may record such lien in the records of any municipality in which the real estate of such qualified data center is located but no such lien shall be enforceable against a bona fide purchaser or qualified encumbrancer of such real estate. When any tax with respect to which a lien has been recorded under the provisions of this subsection has been satisfied, the commissioner shall, upon request of any interested party, issue a certificate discharging such lien, which certificate shall be recorded in the same office in which the lien was recorded. Any action for the foreclosure of such lien shall be brought by the Attorney General in the name of the state in the superior court for the judicial district in which the real estate subject to such lien is located, or, if such property is located in two or more judicial districts, in the superior court for any one such judicial district, and the court may limit the time for redemption or order the sale of such real estate or make such other or further decree as it judges equitable.

(P.A. 21-1, S. 1.)

History: P.A. 21-1 effective July 1, 2021.