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Acts Affecting Business

VIEWS: 7 PAGES: 35

									                            Office of Legislative Research
                                 Connecticut General Assembly




                                      BUSINESS




                   Prepared for Members of the Connecticut General Assembly

                                               By:
                                  John Rappa, Principal Analyst
                                 Mary Janicki, Assistant Director

                                           2003-R-0470
                                           July 1, 2003




Lawrence K. Furbish, Director                                                           Room 5300
Phone (860) 240-8400                                                    Legislative Office Building
FAX (860) 240-8881                   Connecticut General Assembly        Hartford, CT 06106-1591
http://www.cga.state.ct.us/olr         Office of Legislative Research            Olr@po.state.ct.us
                           NOTICE TO READERS

   In its 2003 regular session, the General Assembly enacted new laws
and changed existing programs of particular interest to Connecticut's
businesses. This report provides brief highlights of acts that affect the
business community generally and those that affect specific industries,
such as restaurants, pharmacies, and motor vehicle rental companies.
We do not discuss any acts that direct funds to an individual project. We
will revise and update this report, if necessary, to include relevant acts
enacted during the special session in progress when this report was
compiled.

   These summaries are in lay terms and are not intended to be legal
interpretations. We encourage readers to obtain the full text of acts that
interest them from the Connecticut State Library or the House Clerk's
Office. Complete summaries of all public acts passed during the 2003
session will be available in early fall when OLR's Public Act Summary
book is published or via our web page (www.cga.state.ct.us/olr).




        July 1, 2003             Page 2 of 35               2003-R-0470
                                        TABLE OF CONTENTS


Advertising................................................................................................................... 6
    Highway Signs.......................................................................................................... 6

Banks, Finance, and Insurance.................................................................................. 6
    Secured Transactions ............................................................................................... 6
    Medical Savings Accounts........................................................................................ 6
    White-Collar Crime.................................................................................................. 6

Budget Reductions ...................................................................................................... 7

Construction ................................................................................................................ 7
    Notice of Zoning Decisions ...................................................................................... 7
    Retainage In Private Sector Construction Contracts............................................... 8
    Sale of Electric, Gas, and Oil Fired Heating Units (Vetoed)................................... 8
    State Construction Contracts ................................................................................... 9

Consumers ................................................................................................................. 10
    Extended Warranties .............................................................................................. 10
    Gaming Facilities ................................................................................................... 10
    Pharmacy Care To Long-Term Care Facilities Residents..................................... 10
    Spam Restrictions ................................................................................................... 11
    Identity Theft........................................................................................................... 11
    Gas Drive-offs ........................................................................................................ 11
    Truck and Van Rental............................................................................................. 12
    Vicarious Liability.................................................................................................. 12

Corporations.............................................................................................................. 13
    Professional Service Corporations, Business Corporations, Nonstock
    Corporations, Limited Partnerships, Limited Liability Companies and
    Partnerships ........................................................................................................... 13
    Professional Corporations of Physician Assistants and Advanced Practice
    Registered Nurses, Business Corporation Shares and References In Documents To
    Extrinsic Facts........................................................................................................ 14

    September 24, 2010                                Page 3 of 35                                  2003-R-0470
                                    Table of Contents (continued)

    Electronic Transactions ......................................................................................... 15

Economic Development ............................................................................................ 16
    Business Loans and Technical Assistance For Low- and Moderate-Income People
    ................................................................................................................................ 16

Electric and Telecommunications Utilities ............................................................. 16
    Energy Conservation and Load Management Funds............................................. 16
    Electric Plant Mercury Emissions.......................................................................... 16
    Electric Restructuring ............................................................................................ 17
    Moratorium On Long Island Sound Projects ......................................................... 18
    Long-Term Planning For Energy Facilities........................................................... 18

Labor.......................................................................................................................... 19
    Access To Electronically Recorded Personnel Files.............................................. 19
    Group Health Insurance For Early Retirees.......................................................... 19
    Structured Settlements............................................................................................ 20
    Expanding State Employee Health Plan Coverage To Small Employers .............. 21
    Employee Assistance Program............................................................................... 21
    Apprenticeship Training......................................................................................... 21
    Using Sick Time For Family and Medical Leave................................................... 22
    Calculation of Overtime Payments......................................................................... 22
    Whistleblowing By Health Care Facility Employees and Reports By Employers
    Regarding Health Emergencies, Diseases Or Hazards In A Workplace ............... 22

Land Use and Environmental Regulation .............................................................. 23
    Pollution Abatement ............................................................................................... 23
    Municipal Land Use Administrative Review Processes ......................................... 23
    Planning and Zoning Commissions and The Location of Auto Dealers, Repairers,
    Junkyards and Gasoline Stations and Adoption of A Rehabilitation Subcode....... 24
    Environmental Quality Programs .......................................................................... 24

Occupations ............................................................................................................... 25
    Occupational Tax On Attorneys ............................................................................. 25
    Broadcasters’ Immunity ......................................................................................... 25

        July 1, 2003                                    Page 4 of 35                                     2003-R-0470
                                    Table of Contents (continued)

    Immunity For Professional Engineers and Regulation of Home Improvement
    Contractors............................................................................................................. 25

Public Health ............................................................................................................. 25
    Asbestos Abatement................................................................................................ 25
    Hospital Billing Practices ...................................................................................... 26

Real Estate ................................................................................................................. 27
    Real Estate Brokers and Salespersons ................................................................... 27
    Hazardous Waste Transfer Liability ...................................................................... 27
    Real Estate Market Analyses.................................................................................. 27

Taxes........................................................................................................................... 28
    Fy 2003 Modifications............................................................................................ 28
    Corporation Tax ..................................................................................................... 29
    Sales and Use Tax .................................................................................................. 30
    Cable T.V. Gross Earnings Tax.............................................................................. 31
    Property Tax........................................................................................................... 31
    Department of Revenue Services’ Administrative Procedures............................... 32

Wine, Liquor, and Cigarettes .................................................................................. 32
    Cigarette Tax.......................................................................................................... 32
    Ownership of Retail Liquor Permit Premises ........................................................ 33
    Statewide Smoking Ban .......................................................................................... 33
    The Dram Shop Act ................................................................................................ 34
    Wine Ordered With Restaurant Meals ................................................................... 34
    The Liquor Control Act .......................................................................................... 34
    Unlawful Delivery of Cigarettes............................................................................. 35




        July 1, 2003                                   Page 5 of 35                                   2003-R-0470
                                              judgment liens on personal
ADVERTISING                                   property. It also makes technical
                                              changes.
Highway Signs                                    (PA 03-62, effective October 1,
                                              2003)
    This act doubles current fees
for Department of Transportation              Medical Savings Accounts
(DOT) outdoor advertising sign
permits and authorizes                            This act exempts high-
changeable message outdoor                    deductible individual and group
advertising signs with specified              policies used to establish
characteristics.                              federally qualified medical
    (PA 03-115, effective July 1,             savings accounts from the $50
2003 for the outdoor advertising              maximum home health care
structure permit fee provisions               deductible required in certain
and October 1, 2003 for the                   health insurance policies. The
changeable message advertising                exemption applies to policies that
sign provisions)                              pay (1) basic hospital expenses,
                                              (2) basic medical-surgical
BANKS, FINANCE, AND                           expenses, (3) major medical
INSURANCE                                     expenses, (4) accident-only
                                              expenses, (5) hospital or medical
Secured Transactions                          expenses, (6) limited benefit
                                              expenses, and (7) hospital and
    This act makes several                    medical expenses covered by
changes regarding secured                     HMOs.
transactions, including (1)                       (PA 03-78, effective July 1,
making government transactions                2003)
subject to Article 9 if permitted
by other applicable statutes and              White-Collar Crime
(2) establishing new bank
execution procedures to reflect                  This act increases the fines for
Article 9 changes that allow                  certain banking and accounting
security interests in deposit                 law violations and the offense
accounts. The act also changes                level for specified white-collar
provisions relating to (1) use of             crimes. It conditions financial
electronic self-help in security or           institutions’ ability to make
lease agreements, (2) security                certain transactions in part on
interests in deposit accounts and             whether they have adequate anti-
inventory, (3) assignments, (4)               money laundering programs,
recording security interests in               policies, and procedures and a
local land offices, (5) fees, and (6)         record of compliance with anti-
                                              money laundering laws and
                                              regulations.
        July 1, 2003                Page 6 of 35                 2003-R-0470
    The act allows the banking               1. requires Medicaid and State
commissioner to revoke, deny,                    Aided General Assistance
suspend, restrict, or condition a                (SAGA) recipients to pay $1
broker-dealer or investment                      for all outpatient medical
adviser applicant’s registration or              services and each
activities if he has engaged in                  prescription;
fraudulent securities or                     2. reduces the dispensing fee
commodities practices. It also                   paid to pharmacies for each
permits him to order a person                    prescription dispenses under
who violated the Uniform                         the Medicaid, SAGA,
Securities Act or who engaged in                 ConnPACE, and AIDS drug
a dishonest or unethical practice                assistance programs from
in the securities or commodities                 $3.85 to $3.60 per
business both to make                            prescription;
restitution and to disgorge any              3. delayed a scheduled 2%
other profit he made by the                      Medicaid rate increase for
violation or bad practice.                       certain nursing homes from
    The act creates whistleblower                January 1, 2003 until June
protections for employees who                    1, 2003; and
assist in investigations or                  4. requires the Department of
proceedings regarding certain                    Social Services to adopt a
state and federal white-collar                   preferred drug list by July 1,
crime laws. It prohibits                         2003.
accountants from altering,                      (PA 03-2, effective upon
destroying, or concealing                    passage)
documents for seven years from
the end of the fiscal year in                CONSTRUCTION
which they concluded an audit.
The act deems a violation of its             Notice of Zoning Decisions
provisions regarding state
investigations, accountants, and                 This act establishes a
certification of financial                   procedure by which a person
statements to be an unfair or                seeking a building permit,
deceptive trade practice.                    certificate of occupancy, or other
    (PA 03-259, effective October            decision from a local building
1, 2003)                                     official may provide the legally
                                             required notice to the public that
BUDGET REDUCTIONS                            the building complies with zoning
                                             laws. By providing such notice,
    This act makes the following             the person limits the time period
major changes that particularly              during which the zoning decision
affect businesses to implement               may be appealed.
General Fund budget reductions                   (PA 03-144, effective October
for FY 2003. It:                             1, 2003)
        July 1, 2003               Page 7 of 35                 2003-R-0470
                                            5. include the form and
Retainage in Private Sector                      provisions of the account in
Construction Contracts                           all solicitations for
                                                 construction services and
    This act requires property                   provide the contractor and
owners to establish escrow                       subcontractor with a copy
accounts for most money they                     before entering into a
withhold under a construction                    contract.
contract from contractors and                   (PA 03-167, January 1, 2004
subcontractors as retainage. The            for the retainage provisions)
act does not apply to
construction contracts involving            Sale of Electric, Gas, and Oil
(1) residential property consisting         Fired Heating Units (VETOED)
of four
or fewer dwelling units; (2)                    This act prohibits the sale of
projects valued at less than                electric, gas, and oil-fired heating
$25,000; and (3) state,                     units that require a building
municipal, or other political               permit for installation in a one-
subdivision public building or              or two-family dwelling unless the
public works projects.                      purchaser provides the seller
    The act requires affected               with either (1) the name, and a
owners to:                                  copy of the occupational license,
1. establish the account in a               of the contractor purchasing the
     Connecticut bank or savings            unit or (2) proof that a building
     and loan association;                  permit for installation has been
2. give contractors monthly                 issued. It requires the seller to
     reports of the value of the            record certain information in
     retainage in the account and           writing at the time of sale,
     any additions to the account           maintain the records for at least
     or payments from it, which             three years, and permit the
     can only be made with the              consumer protection
     owner’s approval (contractors          commissioner or his agents to
     must make the report                   inspect and copy them during
     available for review by                normal business hours. The act
     subcontractors who ask);               authorizes the commissioner to
3. terminate the account when               fine violators $1,000 for each
     work is substantially or fully         violation, and makes each sale of
     completed and after they               a unit that does not meet these
     have paid the contractor in            provisions a separate violation.
     full;                                      The act exempts (1)
4. pay all fees and expenses                manufacturers of electric, gas,
     related to maintaining the             and oil-fired heating units; (2) the
     account; and                           state and its political
                                            subdivisions; and (3) hearth
        July 1, 2003              Page 8 of 35                 2003-R-0470
products (i.e., propane or natural            Public Works (DPW)
gas fueled fireplaces, fireplace              commissioner’s control;
inserts, stoves, log sets, and             6. requires state agencies to
associated venting and                        evaluate contractors after
accessories that simulate the                 construction is completed
flame of a solid fuel fire).                  and requires the Department
   (PA 03-172, effective October              of Administrative Services
1, 2003)                                      (DAS) commissioner to place
                                              the evaluation in the
State Construction Contracts                  contractor’s prequalification
                                              file;
   This act:                               7. requires the DPW
1. requires contractors to                    commissioner to adopt
   prequalify to bid on state and             regulations to implement
   municipal building                         bidding and contracting
   construction contracts                     procedures for building
   estimated to cost more than                construction, including the
   $500,000 and at least                      (a) procedures for evaluating
   partially funded by the state              bids after a contractor’s
   and redefines “lowest                      prequalification status has
   responsible qualified bidder”              been verified and (b) objective
   to include a prequalified                  criteria for evaluating bidder’s
   contractor;                                qualifications;
2. requires advertisements for             8. requires the transportation
   bids on these contracts to                 commissioner to award large
   include the financial capacity,            building construction
   prior experience, and                      contracts to the lowest
   workforce required to do the               responsible qualified bidder
   job;                                       who is prequalified by DAS;
3. prohibits employees with                9. requires the Department of
   decision-making authority                  Consumer Protection to
   from communicating with                    issue any prequalified
   bidders on building                        contractor who applies a
   construction contracts under               certificate of registration as a
   certain circumstances;                     major contractor and
4. prohibits state officials and              prohibits the department
   employees from accepting                   from collecting a registration
   gifts from prequalified                    fee during any period the
   building contractors;                      contractor’s prequalification
5. expands the process for                    is valid; and
   starting emergency                       10. changes the requirement
   restoration on state facilities            for employing construction
   under the Department of                    managers.


        July 1, 2003             Page 9 of 35                 2003-R-0470
   (PA 03-215, effective October            product. The act expands this
1, 2004, except for the provisions          exclusion to include a subsidiary
permitting contractors to                   of the manufacturer.
prequalify with DAS and                         (PA 03-50, effective July 1,
emergency construction, which               2003)
are effective July 1, 2004)
                                            Gaming Facilities
CONSUMERS
                                               The act restricts access of
Extended Warranties                         people under age 21 in Indian
                                            casinos that conduct class III
   This act subjects motor                  gaming, and imposes fines,
vehicle extended warranty                   imprisonment, and criminal
contracts to the statutory                  penalties for violations. Under
requirements for other types of             federal law, class III games are
extended warranties. It expands             casino-type games of chance,
the definition of an extended               including blackjack, poker, dice,
warranty to contracts or                    roulette, and baccarat.
agreements to (1) perform or                   (PA 03-114, effective October
provide indemnification for                 1, 2003)
repair, replacement, or
maintenance of a product,                   Pharmacy Care to Long-Term
instead of just for repair service          Care Facilities Residents
and (2) cover operational or
structural failure due to normal                This act requires the
wear and tear in addition to                Department of Social Services
defects in material, skill, or              (DSS) commissioner to update
workmanship.                                and expand the list of drugs
   By law, an extended warranty             included in the Nursing Home
provider is someone who issues,             Drug Return Program by June
makes, provides, or offers to               30, 2003, and annually after
provide an extended warranty to             that. It requires the list to
a buyer. The act requires that a            include the 50 drugs with the
provider also be contractually              highest average wholesale price
obligated to provide service under          that meet the program’s
the extended warranty. Also by              requirements. DSS must do this
law, a retail seller of an extended         in consultation with the
warranty is excluded from the               Pharmacy Review Panel, which
provider definition if it is the            advises DSS on the operation of
manufacturer of the covered                 its pharmacy benefit programs,
                                            including cost savings initiatives.
                                                The act also allows the
                                            commissioner, within available
                                            appropriations, to reimburse
        July 1, 2003             Page 10 of 35                 2003-R-0470
pharmacies or pharmacists for                toll-free telephone number or
services they provide to residents           valid e-mail address the recipient
in long-term care facilities,                can use to unsubscribe or
(including nursing homes, rest               otherwise notify the sender not to
homes, residential care homes,               send any more spam.
residential facilities for mentally              The act also includes
retarded people, and facilities              provisions on consumer leases of
served by assisted living services           computers.
agencies), in addition to other                  (PA 03-128, October 1, 2003,
reimbursements and dispensing                except the provisions on
fees already allowed under the               consumer leases of computers
state’s medical assistance                   are effective on July 1, 2003)
programs, if the services improve
the residents’ quality of care and           Identity Theft
save the state money, as
determined by the commissioner.                 This act imposes graduated
These services may include                   penalties for identity theft
emergency and delivery services              violations, establishes
offered on all medications,                  procedures to assist victims of
including intravenous therapy,               the crimes, and requires
24 hours a day, seven days a                 businesses to revise certain
week.                                        practices to prevent the crimes. It
    (PA 03-116, effective upon               prohibits businesses from
passage for the drug return                  printing more than the last five
program provisions and July 1,               digits of a credit or debit account
2003, for the pharmacy service               number on a consumer’s receipt
reimbursements)                              and from publicly disclosing
                                             Social Security numbers.
SPAM Restrictions                               (PA 03-156, effective October
                                             1, 2003)
    This act, with some
exceptions, restricts the activities         Gas Drive-Offs
of people who e-mail unsolicited
advertising material (“spam”). It               This act specifies that motor
prohibits people and entities                fuel theft can be punished as
from sending spam, or causing it             larceny. A person commits this
to be sent, after the intended               crime if, with intent to
recipient has notified them that             appropriate fuel to himself or
he does not want to receive it. In           another, he delivers it, or causes
all other transmissions to                   delivery of it, into a vehicle’s
Connecticut residents, (1) the e-            tank, a portable container, or
mail’s subject line must include             both on a retailer’s premises and
the letters “ADV” and (2) the body           leaves the premises without
of the message must include a                paying for it.
        July 1, 2003              Page 11 of 35                 2003-R-0470
   The punishment for larceny                 to the same extent the operator
depends on the value of the                   would have been had he owned
property taken.                               the vehicle.
   (PA 03-201, effective October                  The act exempts from this law
1, 2003)                                      people who lease private
                                              passenger vehicles to others, if
Truck and Van Rental                          the total lease term is for one
                                              year or more, and the vehicle is
    This act requires truck and               insured for bodily injury liability
van rental companies that secure              for at least $100,000 per person
reservations for their vehicles               and at least $300,000 per
through a check, money order,                 occurrence at the time the
note, credit card, debit card, or             damages are incurred. This
transaction authorization                     exemption applies to (1) private
mechanism to deliver the vehicle              passenger cars; (2) station
to the consumer at the time and               wagons; (3) campers; (4) truck-
place specified when the                      type vehicles with a gross vehicle
reservation was made.                         weight of less than 10,000
Companies unable to comply                    pounds that are registered either
must provide an alternative                   as passenger cars, as a
rental truck comparable to the                passenger and commercial
one the customer reserved.                    vehicle, or used for farming
    A company that violates the               purposes; and (5) commercially
act is liable for damages of up to            registered vehicles as defined by
twice the agreed-upon daily                   law. The act specifically excludes
rental rate. Each rental company              from this exemption (1)
must post, in a prominent                     motorcycles and (2) motor
location, a clearly legible sign              vehicles used as a public or livery
explaining that failure to provide            conveyance.
the reserved truck or a                           The act also exempts from
comparable alternative subjects               liability people who rent to others
them to this penalty.                         trucks, tractor trailers and
    (PA 03-245, effective October             tractor trailer units with a gross
1, 2003)                                      vehicle weight of 10,000 pounds
                                              or more if (1) the lease or
Vicarious Liability                           applicable contract term is for
                                              one year or more, and (2) the loss
   By law, anyone renting or                  or claim is inured by any
leasing a motor vehicle he owns               combination of coverage, through
to another person is liable for               an insurer, for at least $2
personal or property damage                   million.
caused by the vehicle’s operation                 The act exempts from double
                                              or treble damages the owner of a
                                              rental or leased motor vehicle
        July 1, 2003               Page 12 of 35                 2003-R-0470
who was not operating the                   adjustments to these laws to
vehicle when the damages                    reflect mergers that involve other
occurred.                                   entities.
   The act applies to causes of                 The act also authorizes stock
action that arise on or after               corporations to do share
October 1, 2003.                            exchanges with these other
   (PA 03-250, effective October            business entities by allowing
1, 2003)                                    their shares to be exchanged for
                                            shares, cash, or other types of
CORPORATIONS                                property.
                                                The act changes the
Professional Service                        conditions under which stock
Corporations, Business                      corporations may sell their
Corporations, Nonstock                      assets, other than in the ordinary
Corporations, Limited                       course of business, without
Partnerships, Limited Liability             shareholder approval. Prior law
Companies and Partnerships                  required shareholder approval if
                                            a disposition involved all, or
    This act allows stock                   substantially all, of the
corporations to merge with                  corporation's property. The act
partnerships, limited                       instead requires such approval if
partnerships, limited liability             a disposition would leave the
partnerships, limited liability             corporation without a significant
companies, joint ventures, joint            continuing business activity. It
stock companies, business                   establishes a test to determine if
trusts, statutory trusts, and real          this new standard has been met.
estate investment trusts. It                It establishes a similar test for
grants similar authority to                 nonstock corporations.
limited partnerships, limited                   The act makes numerous
liability companies, and                    changes in the laws relating to
partnerships.                               dissolved corporations, including
    By law, stock corporations,             procedures to deal with known
limited liability companies, and            and unknown claims.
limited partnerships organized                  The act makes numerous
under Connecticut law may                   changes to stock corporation
merge only with their own type of           laws relating to corrections of
entity. Partnerships may merge              filed documents, the
only with partnerships or limited           corporation's acquisition of its
partnerships.                               own shares, distributions to
    The act makes the laws that             shareholders, removal of
currently apply to these mergers            directors by judicial proceeding,
also apply to mergers with the              liability for unlawful
other entities. It makes a few              distributions, and amendments
                                            to certificates of incorporation
        July 1, 2003             Page 13 of 35                2003-R-0470
and bylaws. It makes similar                statutory trust and other
changes for nonstock                        statutory trusts or other entities.
corporations with respect to                   (PA 03-18, effective July 1,
correcting filed documents,                 2003, except for the validating
liability for unlawful                      provision, which is effective upon
distributions, and amendments               passage)
to the certificates of
incorporation.                              Professional Corporations of
    The act makes numerous                  Physician Assistants And
changes in the laws dealing with            Advanced Practice Registered
nonstock corporations relating to           Nurses, Business Corporation
ex-officio directors, staggered             Shares and References In
terms for directors, and court-             Documents To Extrinsic Facts
appointed board members.
    The act validates any                       This act authorizes provisions
certificate of amendment for                of a certificate of incorporation
stock corporations, or certificates         and the terms of a merger or
of merger or share exchange filed           share exchange plan to be made
between January 1, 1997, and                dependent upon "facts objectively
the act’s passage, if they were             ascertainable" outside of them. It
otherwise valid except for an               authorizes terms of shares to be
incorrect or incomplete statement           made dependent on facts
of the information required by              objectively ascertainable outside
the laws under which they were              the certificate of incorporation.
filed with respect to the approval          The act allows provisions to
of the shareholders.                        implement an amendment to a
    The act reduces the fees for            certificate of incorporation that
filing a certificate of merger or           provides for an exchange,
consolidation between limited               reclassification, or cancellation of
partnerships from $30 for each              issued shares to be made
limited partnership that is                 dependent upon facts objectively
involved to one $30 fee. It                 ascertainable outside the
establishes a $30 fee for mergers           certificate of amendment.
or consolidations between limited               The act establishes certain
partnerships and other entities.            rules that apply when any term
    It makes similar changes for            of a merger or share exchange
filing a certificate of merger or           plan or document filed with the
consolidation for limited liability         secretary of state is to be
companies and limited liability             dependent on facts objectively
partnerships. Finally, it                   ascertainable outside the plan or
establishes a $30 fee for filing a          filed documents.
certificate of merger or                        The act specifies that the term
consolidation involving a                   "filed document" does not refer to
                                            documents foreign corporations
        July 1, 2003             Page 14 of 35                 2003-R-0470
must file in connection with a                  The act adds physician's
certificate of authority to transact         assistants and advanced practice
business in Connecticut, or with             registered nurses to the list of
the annual reports domestic and              professions that may offer their
foreign corporations authorized              services through a professional
to transact business in                      service corporation. It also
Connecticut must file.                       authorizes a professional service
    The act authorizes a board of            corporation to (1) be formed
directors, if otherwise allowed by           solely to render professional
the certificate of incorporation,            services by a physician, and a
without shareholder approval, to             physician assistant or an
(1) classify any unissued shares             advanced practice registered
into one or more classes or into             nurse and (2) have as its
one or more series within a class;           shareholders only people licensed
(2) reclassify any unissued                  or otherwise legally authorized to
shares of any class into one or              render one of the services for
more classes or into one or more             which it was incorporated.
series within one or more classes;              (PA 03-158, effective October
or (3) reclassify any unissued               1, 2003)
shares of any series of any class
into one or more classes or into             Electronic Transactions
one or more series within a class.
    The act specifies that                      This act subjects Article 2A of
certificates of incorporation may            the Uniform Commercial Code on
authorize one or more series of              leasing goods to the Uniform
shares within a class. It requires           Electronic Transactions Act
that all shares of a class or series         (UETA). UETA already applies to
have the same terms, including               the sale of goods under Article 2.
preferences, rights, and                     UETA establishes a legal
limitations that are identical with          foundation for using electronic
those of other shares of the same            communications in transactions
class or series, unless the                  where the parties agree to
certificate of incorporation                 conduct business electronically.
explicitly sets forth the                       (PA 03-278, effective upon
variations.                                  passage)
    The act authorizes a
corporation to issue rights,
options, or warrants for the
purchase of other securities of
the corporation instead of just
corporate shares. It specifies that
this authorization constitutes
authority to issue such shares or
other securities.
        July 1, 2003              Page 15 of 35                2003-R-0470
ECONOMIC DEVELOPMENT                        ELECTRIC AND
                                            TELECOMMUNICATIONS
Business Loans and Technical                UTILITIES
Assistance for Low- And
Moderate-Income People                      Energy Conservation and Load
                                            Management Funds
    This act expands the
Community Economic                              From February 2003 through
Development Fund’s (CEDF)                   July 2005, the act requires the
authority to provide financing to           Department of Public Utility
low- and moderate-income people             Control (DPUC) to authorize
statewide for establishing,                 electric distribution companies to
maintaining, and expanding                  send a total of $1 million per
businesses. CEDF is a nonprofit             month from their energy
organization created under the              conservation and load
statutes to help economically               management funds to a
distressed neighborhoods develop            nonlapsing account in the
businesses and create jobs.                 General Fund to pay for state
Under the act, people qualify for           agencies’ electricity costs and
financial assistance if they earn           conservation projects. Each
no more than the state median               fund’s contribution to the $1
income (currently $75,400), as              million must be in proportion to
determined by the U.S.                      its fund receipts.
Department of Housing and                       (PA 03-2, effective upon
Urban Development.                          passage)
    Prior law allowed CEDF to
provide this and other types of             Electric Plant Mercury
financing to anyone regardless of           Emissions
income, but only in the state
designated areas. While the act                This act requires certain coal-
allows CEDF to extend financial             burning electric plants to reduce
assistance to low- and moderate-            the amount of mercury they emit,
income people statewide, 70% of             starting July 1, 2008. It sets
the total must still go to projects         standards the plants must meet,
in TICs.                                    requires them to test their
    (PA 03-93, effective October 1,         generating units quarterly, and
2003)                                       requires owners to submit
                                            quarterly reports to the
                                            environmental protection
                                            commissioner. The standards
                                            apply to the Bridgeport and AES
                                            Thames (Uncasville) generating
                                            plants. The act authorizes the
        July 1, 2003             Page 16 of 35                2003-R-0470
commissioner to set alternative               after the standard offer service
emission limits if the plants                 requirement ends. It establishes
cannot meet its requirements                  separate pricing rules for such
with properly installed and                   service provided to (1) small and
operating control technology.                 medium-sized customers (named
The commissioner’s                            “standard service”) and (2) large
implementation of these                       customers (“last resort service”).
provisions does not suspend any               It requires utilities to procure
underlying procedure or                       power for standard service in a
requirement in state regulations.             way that mitigates rapid changes
    The act also requires the                 in electricity prices.
commissioner to review mercury                    The act entitles utilities to a
emission limits applicable to all             fee for procuring power for
units in the state by July 1, 2012            transitional standard offer
and authorizes him to adopt                   service. It also entitles them to
regulations imposing more                     their actual administrative costs
stringent mercury emission limits             in providing the services the act
on or after that date.                        mandates, as well as the back-up
    (PA 03-72, effective on                   service they are required to
passage)                                      provide to customers whose
                                              supplier fails them.
Electric Restructuring                            Under the act, the
                                              Department of Public Utility
    This act revises the electric             Control (DPUC) can require a
restructuring law, particularly               utility to offer, through a
those provisions requiring                    competitive supplier, one or more
electric utilities to provide service         alternatives to transitional
to customers who do not choose                standard offer service and
a competitive supplier. It                    standard service, including an
extends, for three years, the                 alternative that includes more
requirement that they provide                 renewable energy than is
standard offer service (renamed               required by law and one that
“transitional standard offer                  promotes energy conservation.
service”) to such customers and                   The law requires electric
increases the maximum rate that               suppliers to obtain part of their
they can charge for it. It                    power from renewable resources.
reallocates the “adder,” (the                 This provision is known as the
difference between the utilities’             “renewable portfolio standard”
cost of standard offer service and            (RPS). The act (1) reduces the
its price) to offset future rate              total amount of renewable power
increases.                                    suppliers must obtain, (2)
    The act modifies the                      modifies what counts as
requirement that utilities provide            renewable resources and where it
default service to such customers             can be produced, and (3) extends
        July 1, 2003               Page 17 of 35                 2003-R-0470
the modified RPS to apply to                 the systems benefits charge,
utilities in the service they                which are effective January 1,
provide to customers who do not              2004)
choose suppliers. The act
extends to utilities other                   Moratorium on Long Island
environmental provisions that                Sound Projects
currently apply to suppliers.
    The act requires utilities to                This act extends for one year,
provide DPUC with information                until June 3, 2004, a
regarding the economic and                   moratorium on state agency
environmental characteristics of             consideration or final decisions
their power. It provides for                 on any electric power line, gas
several other consumer                       pipeline, or telecommunications
information and education                    crossing of Long Island Sound
programs, including one to                   that requires either a certificate
provide consumers information                of environmental compatibility
regarding suppliers, and a restart           and public need from the
of DPUC's education program.                 Connecticut Siting Council or
    The act allows (1) DPUC to               approval by the Federal Energy
issue a request for proposals if it          Regulatory Commission. The
determines that the construction             legislature initially approved a
of new temporary generation                  one-year moratorium in 2002.
facilities would reduce federally                (PA 03-148, effective on
mandated transmission costs                  passage)
and (2) the costs of these
facilities to be recovered in the            Long-Term Planning for
systems benefits charge.                     Energy Facilities
    Finally, the act limits cable TV
companies to a five-year                         This act expands the
franchise if they fail to meet               Connecticut Energy Advisory
certain requirements.                        Board’s (CEAB) responsibilities to
    (PA 03-135, effective July 1,            include energy planning and the
2003, except for (1) the                     identification of alternative
provisions on requests for                   solutions to the state's energy
proposals, the DPUC study,                   infrastructure needs.
interconnection rates and                        The act requires CEAB to
standards, the reallocation of the           develop guidelines by December
adder, and a separate line on                1, 2004 for evaluating alternative
acts for federally mandated                  proposals for addressing the
congestion costs, which are                  state's energy infrastructure
effective upon passage; (2) the              needs. After that date, CEAB
cable TV provisions, which are               must issue a request for
effective October 1, 2003; and (3)           proposals (RFP) to identify
the provisions on the RPS and                alternative solutions when the
        July 1, 2003              Page 18 of 35                 2003-R-0470
Siting Council receives an                  information provided to a
application for a certificate to            municipality are effective October
build an energy facility. The act           1, 2004)
allows the board to issue an RFP
on its own initiative to address            LABOR
needs identified in its annual
plan. It requires CEAB to                   Access To Electronically
evaluate any proposals it                   Recorded Personnel Files
receives, as well as the original
application, using the guidelines               This act adds electronic mail
it develops. CEAB must report its           and facsimiles to the documents
findings to the Siting Council;             a private employer must keep in
they become part of the record              an employee’s personnel file. By
upon which the Siting Council               law, if an employer keeps
must make its decision.                     personnel files, an employee’s file
    The act also (1) requires an            must contain papers, documents,
applicant for a Siting Council              and reports that are, or once
certificate for an energy facility,         were, used by the employer to
starting July 1, 2003, to pay a             determine the employee’s
fee of $25,000, which goes to an            eligibility for employment,
account the act establishes to              promotion, additional
reimburse the potential host                compensation, transfer,
municipality or municipalities for          termination, or disciplinary or
expenses they incur in                      other adverse personnel action.
participating in the Siting                 Such documents include
Council process and makes many              employee evaluations or reports
procedural changes and (2)                  relating to the employee’s
imposes more stringent council              character, credit, and work
approval standards for                      habits. By law, employers must
underwater transmission lines               allow an employee, upon written
and changes the decision criteria           request, to inspect his own
for other energy and                        personnel file.
telecommunications facilities                   (PA 03-5, effective October 1,
regulated by the council, starting          2003)
July 1, 2003.
    (PA 03-140, effective July 1,           Group Health Insurance for
2003, except (1) the provision on           Early Retirees
siting temporary generation
facilities is effective on passage             This act requires group health
and (2) the provisions related to           insurance plans to give people an
RFP and the applicant’s                     option to continue their group
submission to CEAB of                       coverage at their own expense if
                                            they quit their job, take a leave of
                                            absence, or reduce their hours
        July 1, 2003             Page 19 of 35                 2003-R-0470
because they become eligible to                 before entering a transfer
receive Social Security benefits.               agreement;
This coverage must be available             2. requires the transferee,
to the employee and his                         rather than the payee, to seek
dependents until he becomes                     approval of the transfer and
eligible for Medicare. Under                    give notice to interested
federal law, people can retire with             parties;
a reduced Social Security benefit           3. allows approval by a
at age 62, but are not eligible for             responsible administrative
Medicare until age 65 unless                    authority, as well as a court;
they are disabled.                          4. expands the types of
    (PA 03-77, effective October 1,             transfers subject to the
2003)                                           approval requirements;
                                            5. includes more specific
Structured Settlements                          requirements for approval;
                                            6. specifies certain
    This act makes a number of                  consequences of a transfer;
changes to the law governing the            7. alters the jurisdiction and
arrangement for periodic                        notice requirements for the
payment of damages by a                         hearing;
settlement or judgment in a                 8. includes rules about
personal injury or workers'                     disputes, life-contingent
compensation claim (i.e., transfer              payments, penalties, and
of structured settlement                        liability; and
payments). The payee is the                 9. changes some definitions.
person who receives the                        The act’s provisions apply to
payments and the obligor is the             transfer agreements executed
person obligated to make the                after September 30, 2003. The
periodic payments. In a transfer            act does not authorize a transfer
of structured settlement                    that violates any law and does
payments, the payee gives the               not imply that any transfer under
right to receive the payments to a          an agreement before October 1,
transferee.                                 2003 is valid or invalid.
    Under prior law, the                       As under prior law, these
transferee had to make certain              requirements for valid transfers
disclosures to the payee before             cannot be waived.
entering a transfer agreement                  (PA 03-110, effective October
and a court had to approve the              1, 2003)
transfer. The act:
1. changes the disclosure
    requirements and requires
    them to be made at least
    three, rather than 10, days


        July 1, 2003             Page 20 of 35                2003-R-0470
Expanding State Employee                  sponsored or authorized by the
Health Plan Coverage to Small             employer. Existing law prohibits
Employers                                 anyone from requiring state
                                          employees to disclose information
   This act adds employees of             or records about their
small employers to the list of            participation in an EAP
those for whom the comptroller,           sponsored or authorized by the
with the attorney general and the         state.
insurance commissioner’s                     The act prohibits an EAP,
approval, is authorized to                including its agents and
arrange group hospital, medical,          representatives, from disclosing
and surgical health insurance             any information or records about
under the state employee health           an employee’s voluntary
plan. Under the act, a small              participation in a program
employer can, on average, have            without the person’s prior written
no more than 50 employees, at             consent, unless disclosure is
least half of whom must be                necessary to prevent harm to the
employed in the state.                    employee or others. Records of
   The act requires (1) any               state employees, who already
coverage arranged for small               have this written consent
employers to continue to be               protection, also are subject to
underwritten according to the             disclosure when necessary to
small employer community rating           prevent harm under the act.
law and (2) small employers to               (PA 03-187, effective October
comply with the same state                1, 2003)
employee plan participation
requirements that apply to                Apprenticeship Training
employees of community action
agencies, nonprofit corporations,            This act requires anyone
and municipalities.                       sponsoring an apprenticeship
   (PA 03-149, effective on               program registered with the DOL
passage)                                  as of July 1, 2003 to pay an
                                          annual $30 registration fee for
Employee Assistance Program               each apprentice participating in
                                          the program until the
   This act prohibits anyone              apprenticeship is completed and
from requiring an employee                the participant receives a
assistance professional or                journeyperson card, if required,
employee to disclose any                  or the program is cancelled by
information or records                    the sponsor or deregistered by
concerning or confirming the              the DOL for cause, whichever is
employee’s voluntary                      earlier.
participation in an employee                 (PA 03-207, effective upon
assistance program (EAP)                  passage)
       July 1, 2003            Page 21 of 35                2003-R-0470
Using Sick Time for Family                  hearing on the matter and
and Medical Leave                           provide each party with written
                                            notification of his decision.
    This act allows private-sector             (PA 03-213, effective October
employees to use up to two                  1, 2003)
weeks of sick time while on leave
under the state’s Family Medical            Calculation of Overtime
Leave Act (FMLA). It prohibits              Payments
employers from denying such use
or firing, threatening to fire,                Prior law permitted “variable
demoting, suspending, or in any             rate” overtime for certain
way discriminating against an               employees subject to overtime
employee who uses or tries to use           rules. This act prohibits
sick leave for FMLA purposes.               variable-rate overtime for such
The new leave provision allows              employees if they (1) earn both
an employee (1) to attend to the            salary and commission and (2)
serious health condition of a               are employed as delivery drivers
child, spouse, or parent or (2) for         or sales merchandisers.
the birth or adoption of a child.              (PA 03-239, effective October
    Under prior law, employers              1, 2003)
could, but were not required to,
allow employees to use                      Whistleblowing by Health Care
accumulated sick time to attend             Facility Employees and
to the serious health condition of          Reports by Employers
a child, spouse, or parent. The             Regarding Health
act and existing law apply to               Emergencies, Diseases or
private employers with more than            Hazards in a Workplace
75 employees. The act applies
only to employers with written                  This act requires employers to
policies to pay employees who               notify employees of potential
miss work due to illness. Its               risks from a health emergency,
definition of sick leave excludes           disease cluster, or imminent
compensation for missing work               hazard and recommended
that is provided through an                 measures to reduce the
employer’s plan, such as, short-            associated risks.
or long-term disability insurance.              It also provides protections
    The act allows an employee              against discriminatory treatment
aggrieved by a suspected                    of, or retaliation against,
violation of the act to file a              employees of a health care facility
complaint with the labor                    who submit a complaint, or
commissioner, who must hold a               initiate or cooperate in a
                                            government investigation or
                                            proceeding related to conditions,
                                            care, or service issues at that
        July 1, 2003             Page 22 of 35                 2003-R-0470
facility. It requires a health care         discharge. This act authorizes
facility that discriminates or              the DEP commissioner to request
retaliates against an employee to           that the attorney general ask a
reinstate him and reimburse him             court to order the clean-up of the
for lost wages, lost work benefits,         effects of an illegal discharge. By
and any reasonable legal costs he           law, the attorney general must
incurs. It specifies that its               bring these actions in Hartford
provisions and remedies are not             Superior Court, and such
exclusive and are in addition to            requests take precedence over
others available in statute or              other civil actions.
common law.                                     (PA 03-125, effective July 1,
    The act also requires the               2003)
Department of Public Health
(DPH) to adopt regulations on               Municipal Land Use
minimum and maximum                         Administrative Review
temperatures for areas in                   Processes
nursing homes and rest homes.
They may be based on standards                 This act standardizes the
set by national public or private           timeframes under which land use
entities after research into                commissions must act on
appropriate temperature settings            applications and the
to ensure residents’ health and             requirements under which they
safety. DPH must make these                 must notify the public and other
recommendations available to                parties about the public hearings
nursing homes, rest homes, and              they hold on these matters. In
the public, and post them on its            doing so, it changes the
website.                                    timeframes for wetlands
     (PA 03-272, effective October          commissions to act on
1, 2003)                                    applications and the extent to
                                            which all land use commissions
LAND USE AND                                can extend the timeframes for
ENVIRONMENTAL                               acting on applications. The act
REGULATION                                  also makes technical changes.
                                               The act requires sewer
Pollution Abatement                         districts and water pollution
                                            control authorities to act on
   By law, people, companies,               certain applications or requests
and municipalities must have a              within 65 days after the date they
Department of Environmental                 were received. This timeframe
Protection (DEP) permit to                  applies to requests to determine
discharge any water, substance,             the sewer capacity of proposed
or material into state waters, and          land uses, approvals for sewer
the attorney general may file an            connections the applicant must
action in court to halt an illegal          pay, and any other applicant-
        July 1, 2003             Page 23 of 35                 2003-R-0470
funded proposal for treating or             officials, to approve the location
disposing of wastewater. These              of gas stations. It also eliminates
bodies can extend this timeframe            the need for a junkyard to obtain
if the applicant agrees. The act            a Department of Motor Vehicles
does not limit the number of                (DMV) license as a condition of
extensions they can request, but            obtaining local land use
it does limit the total number of           approval.
days for all extensions to 65.                  By law, the state building
    (PA 03-177, effective October           inspector and the Codes and
1, 2003 and applicable to land              Safety Committee, in
use applications filed on or after          consultation with the public
that date)                                  safety commissioner, must revise
                                            the state building and fire codes
Planning and Zoning                         to emphasize performance, rather
Commissions and The Location                than design specifications. As
of Auto Dealers, Repairers,                 part of this mandate, the
Junkyards and Gasoline                      inspector and committee must
Stations and Adoption of a                  develop separate standards for
Rehabilitation Subcode                      building rehabilitation. The act
                                            instead requires the development
    This act explicitly allows              of a rehabilitation subcode,
municipal land use and building             which must include provisions to
agencies and their agents to                identify and standardize
conduct a pre-application review            economically feasible
on a proposed project with the              rehabilitation standards and
applicant at his request. The               modifications that ensure public
review and any results or                   health, safety, and welfare and
information obtained from it (1)            that protect the environment. It
are not binding on the applicant            requires the commissioner to
or the agency or official                   develop regulations by January
authorized to conduct the review            1, 2005 to implement these
and (2) cannot be appealed under            provisions.
the statutes. Agencies can                      (PA 03-184, effective October
conduct the pre-application                 1, 2003)
review jointly, separately, or in
any combination.                            Environmental Quality
    The act eliminates the need to          Programs
obtain certain local approval for
certain motor vehicle-related land             This act makes additional
uses and repeals related notice,            polluted property eligible for
hearing, and fee requirements. It           assessment and remediation
allows zoning and planning and              under the Urban Sites Remedial
zoning commissions, as well as              Action Program and changes the
legislative bodies and certain              conditions under with the DEP
        July 1, 2003             Page 24 of 35                 2003-R-0470
commissioner may remediate                 child and suspected abductor
particular properties. It also             and the circumstances of the
excludes from Transfer Act                 abduction. This information is
requirements the conveyance of a           covered only when it was
hazardous materials                        provided to the broadcaster by a
“establishment through                     law enforcement agency.
foreclosure of a municipal tax                (PA 03-11, effective October 1,
lien and makes other changes to            2003)
the Transfer Act.
    (PA 03-218, effective July 1,          Immunity for Professional
2003)                                      Engineers and Regulation of
                                           Home Improvement
OCCUPATIONS                                Contractors

Occupational Tax on Attorneys                  This act gives professional
                                           engineers who volunteer their
   The act extends the annual              services in a declared emergency
$450 occupational tax on                   immunity from civil damages
attorneys admitted to practice in          under specified conditions. Also,
Connecticut to attorneys                   it prohibits the motor vehicles
admitted to practice here                  commissioner from issuing a
temporarily under court rules as           commercial motor vehicle
attorneys pro hac vice to conduct          registration to someone found by
a particular case. The act                 the consumer protection
requires such attorneys to file an         commissioner to be acting as a
occupational tax return with the           home improvement contractor
DRS commissioner and pay the               without either being registered or
tax for any year in which they are         participating in the home
temporarily admitted and                   improvement guaranty fund.
practicing law in the state.                   (PA 03-260, effective October
   (PA 03-2, effective upon                1, 2003, except the provision
passage)                                   concerning the Home
                                           Improvement Act takes effect on
Broadcasters’ Immunity                     July 1, 2005)

   This act gives immunity to              PUBLIC HEALTH
broadcasters participating in the
Amber Plan for damage claims               Asbestos Abatement
based on emergency alerts and
information they broadcast                    This act establishes fees for
concerning the abduction of a              certifying asbestos abatement
child. The information covered             workers and site supervisors, as
under the act includes                     well as for approval of asbestos-
descriptions of the abducted               related training and refresher
       July 1, 2003             Page 25 of 35                2003-R-0470
training programs. It also allows           1. adds more detailed
for Connecticut certification by               requirements to hospitals'
endorsement for certain out-of-                filing of free care and reduced
state workers and supervisors.                 care information with the
    By law, asbestos abatement                 Office of Health Care Access
workers and site supervisors                   and requires them to file
must complete a Department of                  annual debt collection reports
Public Health (DPH)-approved                   with it;
training program and be certified           2. requires already mandated
by DPH. The act establishes                    public notices and written
initial and annual renewal                     summaries about hospitals'
license fees of $25 for an                     bed funds (which are used to
asbestos worker certificate and                pay for care for uninsured
$50 for a site supervisor                      patients) to be in English and
certificate. It allows DPH to                  Spanish, describe other free
certify a person licensed or                   or reduced-cost hospital
certified in another state with                policies concerning the
standards substantially similar                indigent, and notify patients
to Connecticut’s and who is not                that they can reapply if
facing any unresolved complaints               rejected;
or pending disciplinary actions.            3. requires hospitals to require
    The act establishes a $500 fee             their collection agents to
for each application or                        include a summary of the bed
reapplication to DPH for approval              fund policy in all bills and
of training programs for asbestos              collection notices;
abatement workers, asbestos                 4. prohibits referral to a
abatement site supervisors, and                collection agent or initiating
asbestos consultants. It also                  an action against a patient
establishes a $250 application                 for fee collection unless
fee for DPH’s approval or                      certain conditions are met;
reapproval of refresher training            5. requires hospitals and others
programs.                                      involved in debt collection to
    (PA 03-87, effective October               discontinue such activities
1, 2003)                                       when they learn that the
                                               debtor is eligible for bed
Hospital Billing Practices                     funds or other financial
                                               assistance;
    This act makes a number of              6. limits prejudgment and
changes to the laws governing                  postjudgment interest on
hospital bed funds, debt                       debt arising from hospital
collection practices, and services             services to 5% per year;
to, and payment for, uninsured              7. provides a $125,000
patients.                                      homestead exemption in the
    The act:
        July 1, 2003             Page 26 of 35                2003-R-0470
    case of a money judgment for            Hazardous Waste Transfer
    hospital services;                      Liability
8. requires that an order for
    installment payments on a                   This act exempts from the
    debt for hospital services and          Transfer Act a person appointed
    a default on those payments             by the Superior Court or any
    occur before a judgment                 other court to sell, convey, or
    creditor can apply to collect           partition real property, or as a
    the judgment; and                       trustee in bankruptcy. The
9. specifies that compliance                Transfer Act imposes disclosure
    with the installment payment            and other procedural
    stays any property execution            requirements and certain civil
    or foreclosure.                         liability in connection with the
   (PA 03-266, effective October            transfer of parcels of land that
1, 2003)                                    might be contaminated by
                                            hazardous materials. The
REAL ESTATE                                 Transfer Act requires owners and
                                            others associated with the
Real Estate Brokers and                     transfer of certain land to make
Salespersons                                specific disclosures to the
                                            purchaser about whether
    This act increases from 30 to           releases of hazardous waste have
60 the minimum number hours                 occurred on the property.
of classroom study in real estate               (PA 03-82, effective October 1,
principles and practices                    2003)
applicants for real estate broker.
    (PA 03-14, effective October 1,         Real Estate Market Analyses
2004)
                                                This act allows real estate
   Another act prohibits the                brokers and salesmen to be
commissioner of consumer                    compensated for estimating the
protection from disapproving (1)            value of real estate as part of a
schools, institutions, or                   market analysis. Under current
organizations that offer current            practice, real estate brokers and
real estate practice and licensing          salesmen estimate the value of
law courses or (2) the courses              real estate as part of a market
themselves solely because they              analysis in connection with (1) a
are offered or taught by                    prospective listing or sale or (2)
electronic means.                           providing information to the
   (PA 03-39, effective October 1,          seller or landlord under a listing
2003)                                       agreement or to a prospective
                                            buyer or tenant under a buyer or
                                            tenant agency agreement. The
                                            act allows brokers and salesmen
        July 1, 2003             Page 27 of 35                 2003-R-0470
to perform these analyses on                   limited liability companies
whatever terms the owner or his                and partnerships, and S
designee and the broker or                     corporations; and
salesperson agree to. By law, the          6. from March 15, 2003 to June
estimate of value must not be                  30, 2004, increases the
referred to or construed as an                 municipal real estate
appraisal.                                     conveyance tax from 0.11% to
   When a fee is charged, the act              .25% of the sale price and
requires owners of residential                 gives 18 towns the option of
property consisting of four or                 increasing their municipal
fewer family units to be given a               real estate conveyance tax by
credit against any compensation                an additional quarter point to
they owe the broker or salesmen                0.5%.
under the listing contract.                   (PA 03-2, with various
   (PA 03-101, effective October              effective dates)
1, 2003)
                                              Another act makes changes to
TAXES                                      various taxes administered by
                                           the Department of Revenue
FY 2003 Modifications                      Services (DRS). It:
                                           1. clarifies the carry-forward
   This act raises General Fund               provisions of the research and
revenues for FY 2003 by raising               development credit against
several state taxes. It:                      the corporation tax for
1. caps the price of clothing and             biotechnology companies;
    footwear exempt at the sales           2. disallows the “sale for resale”
    tax from items costing no                 sales and use tax exemptions
    more than $50 instead of                  when a purchaser of taxable
    $75;                                      services resells them to an
2. extends the sales tax to for-              affiliate;
    profit health and athletic             3. relaxes qualifications for
    clubs, newspapers, and                    fishermen’s sales tax
    magazine subscriptions (see               exemptions;
    PA 03-4 below);                        4. restricts certain motor fuel tax
3. imposes a 3% sales tax on                  refunds to taxes paid on fuel
    advertising services for                  used in Connecticut;
    developing media and                   5. to match federal law, phases
    cooperative direct mail                   down required annual
    advertising;                              depreciation add-backs to
4. increases the cigarette tax by             Connecticut adjusted gross
    40 cents per pack from $1.11              income (AGI) for those with S
    to $1.51;                                 corporation income subject to
5. imposes a 20% tax surcharge                the personal income tax;
    for 2003 on corporations,
        July 1, 2003            Page 28 of 35                 2003-R-0470
6. expands the commissioner’s                 to (1) 90% of their liability for the
    authority to require taxpayers            current income year or (2) 100%
    to make payments by                       of their liability for the previous
    electronic funds transfer and             year, whichever is less. Under
    to file tax returns, statements,          the safe harbor law, the
    and documents by computer                 percentages due in each
    or other new technology as it             quarterly installment are 30% for
    is developed; and                         the first quarter, 40% for the
7. increases business tax credits             second, 10% for the third, and
    for investments in certain                20% for the fourth.
    programs under the                            (PA 03-2, effective upon
    Neighborhood Assistance Act               passage and applicable to income
    and in day care facilities                years or tax years, as
    primarily for employees’                  appropriate, starting on or after
    children from 40% to 60% of               January 1, 2003; upon passage
    the amount invested.                      for the provision concerning the
    (PA 03-225, with various                  corporation tax installments due
effective dates)                              in June 2003.)

Corporation Tax                                  Research and Development
                                              Tax Credit. This act temporarily
    Business Tax Surcharge.                   reinstates eligibility for research
For 2003, the act imposes a 20%               and development (R&D)
surcharge on (1) the corporation              corporation tax credit refunds for
tax and (2) the annual $250 tax               companies that pay the
on limited liability companies                alternative capital base
(LLCs), limited liability                     corporation tax for a year when
partnerships (LLPs), limited                  they report no net income. By
partnerships (LPs), and S                     law, all companies must pay a
corporations. The surcharge is                tax of 7.5% of net income or 3.1
due, payable, and collectible as              mills per dollar of capital base,
part of each company’s total tax              whichever is higher, but no less
for the year. Companies subject               than $250. Thus, the minimum
to the corporation tax must                   tax a corporation pays is either
calculate the surcharge based on              $250 or the alternative capital
their tax liability before credits.           base tax, whichever is more.
    The act requires corporation                 (PA 03-120, effective upon
taxpayers to adjust their June                passage and applicable to income
2003 installment payments to                  years starting on or after
incorporate its changes in their              January 1, 2002)
liability for the 2003 income year.
It thus overrides a safe-harbor
law requiring corporation tax
payers to pay installments equal
        July 1, 2003               Page 29 of 35                  2003-R-0470
Sales and Use Tax                             Sales Tax On Newspapers.
                                           PA 03-2 imposes the sales and
   Tax Extensions. Starting                use tax on newspapers and
April 1, 2003, the act imposes a           magazines sold on or after April
3% sales and use tax on sales of           1, 2003. This act requires
advertising or public relations            newspaper producers and
services for developing media and          wholesalers to collect the 6%
cooperative direct mail                    sales tax when they transfer
advertising. Taxable services              newspapers to vendors who do
include layout, art direction,             not sell any other taxable items.
graphic design, mechanical                 The act allows these vendors to
preparation, and production                pass the tax along to their
supervision. Under DRS policy,             customers by adding it to the
“cooperative direct mail                   retail sales price of the
advertising” means                         newspapers without remitting the
advertisements or coupons from             amount to the state.
several businesses sent in one                (PA 03-4, effective upon
envelope or bundle to potential            passage and applicable to sales
customers in a specific area.              occurring on or after April 1,
   As of April 1, 2003, the act            2003)
also extends the 6% sales and
use tax to sales of the following             Sales Tax Bond
items and services:                        Requirements for Nonresident
1. health and athletic club                Contractors. This act changes
    services, unless provided by a         the requirements for posting
    municipality or nonprofit              security to guarantee that
    organization or unless the             Connecticut taxes are paid when
    charges for the services are           a nonresident (out-of-state)
    included in club dues or fees          contractor carries out a contract
    already subject to the dues            in Connecticut. It also extends
    tax;                                   the security requirements to all
2. newspapers; and                         business dealings with
3. magazine subscriptions.                 nonresident contractors, not just
   The act limits the sales tax            contracts where tangible
exemption for clothing and                 personal property is consumed or
footwear to items costing less             used. It thus applies its tax
than $50. Prior law exempted               security requirements to
clothing and footwear costing              contracts with nonresident
less than $75.                             contractors that involve only
   (PA 03-2, effective April 1,            services.
2003 and applicable to sales on               The act requires a customer
or after April 1, 2003)                    dealing with a nonresident
                                           contractor to withhold a share of
                                           the contract price and pay it to
       July 1, 2003             Page 30 of 35                2003-R-0470
the DRS commissioner. It                    year ending on the preceding
requires DRS to deduct from the             December 31. Quarterly returns
customer’s deposit any taxes due            must contain the amount of the
as a result of the contractor’s             company’s taxable gross earnings
activities and eliminates the               and any other information the
customer’s liability for taxes              DRS commissioner requires.
payable on the project once he              Annual returns had to contain
makes the deposit and gets a                the company’s taxable gross
DRS receipt for it.                         earnings, name, and location.
    The act eliminates (1) a                    The act specifies that it does
provision requiring the                     not affect annual returns and
nonresident contractor instead of           taxes for the 2002 tax year due
the customer to post security and           on April 1, 2003 under the prior
(2) the option of posting a bond            law.
rather than depositing part of the              Starting with FY 2003, the act
contract price. It also eliminates          allows the comptroller to accrue
lower security requirements for             to the preceding fiscal year all
customers who are direct pay                cable television gross earnings
permit holders. (Direct pay                 tax payments postmarked by
permit holders pay sales and use            July 31 or, if that is a weekend or
taxes directly to DRS rather than           holiday, the following business
through vendors.)                           day.
    Finally, the act changes the                (PA 03-2, effective on passage
deadlines for posting security              and the quarterly tax payment
and defines a nonresident                   requirement applies to calendar
contractor for purposes of the tax          quarters starting on or after
security requirements.                      January 1, 2003.)
    (PA 03-147, effective July 1,
2003 and applicable to contracts            Property Tax
entered into on or after that date)
                                                This act allows applicants who
Cable T.V. Gross Earnings Tax               miss filing deadlines for state-
                                            mandated and state-reimbursed
   The act requires cable t.v.              five-year property tax exemptions
companies to pay their 5% gross             for manufacturing or service
earnings tax on a quarterly                 facilities, certain machinery and
rather than an annual basis,                equipment, and commercial
starting January 1, 2003. It                trucks to apply to the local
requires companies to file tax              municipality rather than the
returns for quarters ending                 General Assembly for deadline
March 31, June 30, September                waivers and bars a municipality
30, and December 31 by the last             from receiving any state payment
day of the following month,                 in lieu of taxes for revenue losses
instead of every April 1 for the            from retroactive exemptions it
        July 1, 2003             Page 31 of 35                 2003-R-0470
grants. It also allows towns to                provision and July 1, 2003 for
use any legal means, other than                the tax liens provision)
a tax lien, to collect delinquent
property taxes from a state                    WINE, LIQUOR, AND
property lessee.                               CIGARETTES
   (PA 03-269, effective upon
passage)                                       Cigarette Tax

Department of Revenue                              This act increases the
Services’ Administrative                       cigarette tax by 40 cents per
Procedures                                     pack, from $1.11 to $1.51 (55.5
                                               to 75.5 mills per cigarette),
    This act limits an employer’s              starting March 15, 2003.
refund or credit for income tax                    It also imposes a 40-cent
withholding only to the                        “floor” tax on each pack of
overpayment he failed to                       cigarettes (20 mills per cigarette)
withhold from an employee’s pay.               that dealers and distributors
    It also allows the DRS                     have in inventory at the close of
commissioner to place tax liens                business or at 11:59 p.m. on
on intangible items owned by                   March 14, 2003, whichever is
delinquent taxpayers as well as                later. By April 15, 2003, each
on his “goods.” Under the act,                 dealer and distributor must
the commissioner may place                     report to DRS the number of
liens for unpaid taxes on                      cigarettes in inventory as of that
accounts, chattel paper,                       time and date. Failure to file the
instruments, documents,                        report by the due date is grounds
investment property, deposit                   for the department to revoke a
accounts, commercial tort                      dealer's or distributor's license,
claims, and general intangibles,               and willful failure to file subjects
as defined in the Uniform                      the dealer or distributor to a fine
Commercial Code. Such items                    of up to $1,000, one year in
include certain rights or claims               prison, or both. A dealer or
to monetary payments, bank                     distributor who willfully files a
accounts, security interests,                  false report can be fined up to
investments, and software. The                 $5,000, sentenced to between
act also expressly allows the                  one and five years in prison, or
commissioner to file a lien                    both.
against a debtor in both this                      (PA 03-2, effective passage.
state an din another if she                    The tax increase applies to
decides it would benefit                       cigarettes sold on and after
Connecticut.                                   March 15, 2003.)
    (PA 03-107, effective in years
beginning on or after January 1,
2003 for the withholding
        July 1, 2003                Page 32 of 35                 2003-R-0470
    Another act:                           to file an affidavit stating either
1. subjects roll-your-own                  that (1) all of the former
     tobacco to the tobacco                permittee’s bills have been paid
     products tax rather than the          or (2) he did not receive direct or
     cigarette tax;                        indirect payment or other
2. specifies a minimum type size           consideration from the former
     for tax warnings in ads for           permittee. It defines
     untaxed cigarettes that               “consideration” as the receipt of
     appear in Connecticut; and            legal tender or goods or services
3. requires someone buying a               to purchase the liquor remaining
     cigarette distributor’s               on the premises, for which bills
     business or inventory to              remain unpaid.
     withhold money from the                   The act authorizes a liquor
     purchase price to cover any           wholesaler who alleges that the
     unpaid cigarette taxes.               applicant received payments or
    (PA 03-225, with various               other consideration from his
effective dates)                           predecessor or that there are
                                           outstanding bills for liquor to file
Ownership of Retail Liquor                 an affidavit with DCP along with
Permit Premises                            supporting documentation. It
                                           authorizes DCP to determine
    This act eliminates a                  whether a hearing is warranted.
requirement for the former                     (PA 03-34, effective October
permittee of a retail                      1, 2003)
establishment to file an affidavit
with the Department of                     Statewide Smoking Ban
Consumer Protection (DCP) in
connection with a new owner                   This act bans smoking in
permit application. This affidavit         most workplaces where five or
must list all outstanding bills            more people work, except in
from liquor wholesalers.                   specially ventilated smoking
    The act modifies the                   rooms; inside restaurants,
information that the new owner             taverns, cafes, and other
applicant must provide to DCP in           establishments with liquor
an affidavit with the permit               permits; and in state and
application. Under prior law, the          municipal buildings, most health
affidavit had to state that all            care institutions, and private
listed obligations had been paid           college and university dorms. (It
unless, after a hearing, DCP               was already banned in public
found that the former permittee            college dorms). It allows smoking
abandoned the business and did             in outdoor areas of alcohol-
not receive any payment or other           serving establishments under
consideration for doing so. The            certain conditions. It permits
act instead requires the applicant         smoking in only 25% of a hotel or
       July 1, 2003             Page 33 of 35                  2003-R-0470
motel’s guest rooms. The ban                Wine Ordered with Restaurant
does not apply to private clubs             Meals
whose liquor permits were issued
before May 1, 2003.                            This act allows a restaurant
   (PA 03-45, effective October 1,          patron to take from the premises
2003 with the ban on smoking in             one open wine bottle if he bought
taverns and cafes effective April           and drank part of it with a full
1, 2004 (another act delays the             course meal eaten at the
ban in bowling alley bars until             restaurant. The restaurant’s
April 1))                                   permittee or his agent or
                                            employee must first securely seal
The Dram Shop Act                           and put the bottle in a bag. Prior
                                            law permitted on-premises
   The Dram Shop Act makes                  consumption only.
someone who sells liquor to an                 (PA 03-228, effective October
intoxicated person liable if that           1, 2003)
person injures someone or
property because of the                     The Liquor Control Act
intoxication. It does not require
proof that the seller acted                    This act makes several
negligently. This act increases             changes to state liquor laws. It:
the maximum amount an injured               1. allows the Department of
person can recover under the act               Consumer Protection to
from $20,000 to $250,000 for                   suspend, revoke, or refuse to
injuries to a single person and                grant or renew a permit for
from $50,000 to $250,000 in                    some grocery stores, based
aggregate for injuries to more                 on their location or the
than one person.                               character of their premises;
   The act eliminates an injured            2. postpones, from October 1,
person’s right to sue a seller for             2003 to April 1, 2004, the
negligence in selling alcohol to               time within which bars in
someone at least age 21. The                   bowling establishments must
Connecticut Supreme Court                      comply with the no-smoking
recently established a common                  provisions of PA 03-45;
law (judge made) right for a                3. allows all types of alcohol,
person to file a negligence lawsuit            rather than wine only, to be
against a seller.                              sold in 100 milliliter bottles,
   (PA 03-91, effective upon                   and specifies that 96 bottles
passage)                                       of this size constitute a case;
                                               and
                                            4. requires liquor permit
                                               applicants who are currently
                                               required to notify the public
                                               about their applications to
        July 1, 2003             Page 34 of 35                 2003-R-0470
    follow the same procedures              3. makes delivery to an
    when they intend to change                 authorized recipient
    the type of live entertainment             conditional on the recipient’s
    they offer as part of a permit             signing and
    renewal application.                       acknowledgement of their
   (PA 03-235, effective October               receipt and presenting proper
1, 2003, except the provisions                 proof of age;
concerning 100 milliliter bottles           4. requires sellers to plainly and
are effective upon passage)                    visibly mark packages with
                                               the word “cigarettes” when
Unlawful Delivery Of                           they do not ship or transport
Cigarettes                                     them in the cigarette
                                               manufacturer’s original
   This act:                                   container or wrapping;
1. prohibits companies that sell            5. starting October 1, 2004,
   cigarettes from shipping them               requires tobacco
   to any Connecticut consumer                 manufacturers that directly
   who is not (a) a state-licensed             or indirectly sell cigarettes in
   cigarette distributor or dealer             Connecticut to be licensed by
   or named on a published                     DRS and pay an annual fee of
   Department of Revenue                       $5,000;
   Services (DRS) list of licensed          6. sets civil and criminal
   distributors and dealers; (b)               penalties for violations; and
   an export warehouse                      7. requires DRS to publish a list
   proprietor or customs bonded                of every cigarette distributor
   warehouse operator; or (c) a                or dealer on its website.
   local, state, or federal                   (PA 03-271, effective July 1,
   government employee or                   2003, except for the cigarette
   agent acting within his official         manufacturer licensing
   duties;                                  requirement, which takes effect
2. prohibits common or contract             October 1, 2004)
   carriers from knowingly
   delivering cigarettes to a               MJ/JR:ro
   residence and prohibits
   carriers or anyone else from
   delivering cigarettes to
   anyone in Connecticut they
   reasonably believe is not one
   of the entities authorized to
   receive them;




        July 1, 2003             Page 35 of 35                 2003-R-0470

								
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