Sec.32-9p-4. Distressed municipality requirement

(a) Any manufacturing facility which is the subject of an application for an eligibility certificate must be located in a municipality which, at the time the eligibility certificate is issued, is a distressed municipality. A distressed municipality must meet one of the following criteria:

(1) A municipality meeting the necessary number of quantitative physical and economic distress thresholds then applicable for eligibility for the urban development action grant program under the federal Housing and Community Development Act of 1977, as amended, as such municipalities are designated by the United States Department of Housing and Urban Development.

(2) A municipality adversely impacted by a major plant closing, relocation or lay off of a covered establishment when such closing, relocation, or layoff results in the loss of at least 7½% of the total non-agricultural and manufacturing employment positions located in the municipality.

(3) A municipality adversely impacted by a major plant closing within the municipality or relocation from the municipality of a covered establishment when such establishment is one of the two largest tax payers within the municipality.

The Department will make the designation of a distressed municipality under the provisions of a major plant closing, relocation or lay off upon request of the legislative body of the municipality and submission of documentation by the municipality. Distressed municipalities may include any town, city or borough, or any town within which is located a distressed unconsolidated city or borough.

(4) A portion of a municipality that is contiguous to an enterprise zone which is located in another municipality, and is eligible for designation as an enterprise zone in accordance with the provisions of subdivisions (2) of subsection (b) of Section 32-70, of the statutes as amended.

(b) The Department shall prepare, keep current and make available for public inspection and distribution a list of municipalities under the investment incentive program.

(c) In the event the Commissioner of Economic Development determines that the distress thresholds referred to in Section 32-9p-4 (a) (1) of these regulations have been materially changed as a result of amendatory federal legislation or administrative regulation, the Department shall give public notice of the determination and establish comparable distress thresholds. The criteria of distress shall include those of high unemployment, poverty levels, the age of housing stock, the rates of growth in job creation, population and per capita income and may include other criteria that are consistent with the purposes of the statutes. The number and character of the municipalities which qualify for assistance under the investment incentive program under the comparable criteria established in such circumstances shall closely approximate that of the municipalities qualifying as distressed municipalities under the superseded thresholds. These regulations shall be amended by the Department in accordance with Chapter 54 of the statutes to include the replacement criteria so established.

(d) Manufacturing facilities located partly within and partly outside a distressed municipality will qualify for an eligibility certificate only if the building, structure or improvement in which the manufacturing activity is carried on is located in a distressed municipality. Buildings, structures or improvements constituting a manufacturing facility which are located partly within and partly without a distressed municipality will qualify for an eligibility certificate, but this fact will be noted on the certificate and no claim for tax exemption will be allowed with respect to that portion of the facility located outside a distressed municipality. In this case, (1) the percentage of the credit against the corporation business tax permitted to be claimed by occupants of the manufacturing facility will be modified by the Department as appropriate to reflect the partial qualification of the facility for tax exemption, taking into account the amount of manufacturing floor space, the nature of the manufacturing activity carried on in each municipality and other appropriate factors and (2) the assessed valuation against which the property tax exemption may be claimed will be the assessed valuation which is determined by the assessor of the distressed municipality to be attributable to the property of the manufacturing facility and any installed machinery and equipment which is located in the distressed municipality. If the buildings, structures and improvements of a manufacturing facility in which the manufacturing activity is carried on are located in two distressed municipalities, the occupants of the facility will be entitled to the full corporation business tax credit and the full property tax exemption will apply, except that the exemption will be allocated between the distressed municipalities by the Department in the manner described above.

(e) The continued effectiveness of any eligibility certificate will not be impaired solely by reason of the fact that subsequent to the issuance of the original certificate the municipality in which a manufacturing facility is located ceases to be a distressed municipality. Such a change in the status of the municipality also will not affect the issuance of replacement eligibility certificates to otherwise qualified subsequent occupants of the facility.

(f) Benefits are extended under the statutes only to manufacturing facilities which at the time an eligibility certificate is issued are located in a distressed municipality. However, a manufacturing facility will not qualify for the issuance of an eligibility certificate if the facility is acquired or constructed in a municipality which at the time of acquisition or construction was included in the distressed municipality list but not included at the time an eligibility certificate is proposed to be issued. In order to minimize any inequities which may result from such circumstances, the Department will monitor the distressed municipality list to ascertain those municipalities which may cease to qualify as a distressed municipality and will process eligibility certificate applications in a manner which to the greatest extent possible preserves the eligibility of manufacturing facility whose location in a distressed municipality was legitimately induced by the prospect of the tax credit or exemption provided by the statutes but whose eligibility is jeopardized by an impending change in the status of the municipality.

(Effective October 29, 1986)